Porsche stock soars on reports of Qatar buy-in

Jul 13, 2009, 10:11 GMT

Stuttgart - Shares in German sports-car maker Porsche jumped 7 per cent Monday after news reports quoting 'banking sources' that the Qatar Investment Authority (QIA) would buy into the business.

A buy-in could alter the balance in a fiercely contested merger between Porsche and volume-car maker Volkswagen, making Porsche Holding SE rather than Volkswagen the dominant partner.

However Christian Wulff, premier of the German state of Lower Saxony which is the main power-broker at Volkswagen, sounded a note of caution, saying he expected a 'good solution' in the next few days with the groups merging.

'We assume that the Porsche and Piech families will clarify things in the next few days,' he told reporters in Berlin, referring to the families who own all the Porsche SE shares and indirectly 51 per cent of Volkswagen.

   Non-voting Porsche preference shares traded in Frankfurt at 45.40 euros, up 7 per cent.

The Sueddeutsche Zeitung newspaper said Monday that the summoning of a July 23 meeting of the Porsche board indicated that QIA had negotiated a deal with Porsche SE executives.

Television reports quoted sources saying Porsche had reached an accord that would allow it to evade Volkswagen thanks to an injection of 7 billion euros (10 billion dollars) from QIA.

The alternative to a buy-in by Qatar would be for Volkswagen to buy the Porsche factories and brand so as to free Porsche SE of 9 billion euros in debt. Reports said Volkswagen might now raise its bid.