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Volkswagen shares hovered around breakeven on Monday, reflecting a mixed response from investors to the automaker’s listing plans for sports car brand Porsche AG in what could be Europe’s third biggest initial public offering.

Volkswagen said on Sunday it was aiming for a valuation of 70 billion-75 billion euros ($70-75 billion) for Porsche AG, slightly below some estimates of up to 85 billion euros, but far outstripping the 49-billion-euro price tag for rival BMW and Mercedes-Benz’s 61 billion euros.

Porsche AG aims to win over investors with its track record of success and high margins, even as shares of other luxury carmakers like Ferrari and Aston Martin have suffered this year in the tumult on European stock markets.

But the structure of the listing, in which Volkswagen’s largest shareholder - Porsche SE - will receive a blocking minority of 25% plus one of the voting ordinary shares, has sparked criticism from some fund managers.

The IPO will list 25% of preferred shares, which do not have voting rights, meaning stock market investors will own just 12.5% of Porsche AG’s capital and have little say.

Porsche SE, the holding company of Germany’s Porsche and Piech families, will pay a 7.5% premium for the shares it receives in the listing. But it will be treated as if it owns the stake even before that premium is transferred, according to the prospectus for the IPO released on Monday.

Shares in Porsche SE were up 3.5% in afternoon trade.

GOVERNANCE UNCERTAINTIES

The prospectus listed risks facing the sports car brand from unstable energy supply and supply chain shortages to difficulties in managing the relationship with Volkswagen and the dual role of Oliver Blume as CEO of both companies.

Nonetheless, the listing has attracted cornerstone investors including Qatar Investment Authority, which is buying 4.99% of the offering; Abu Dhabi’s ADQ, which is investing 350 million euros; as well as T. Rowe Price and Norway’s sovereign wealth fund, investing 750 million euros each.

“Our starting point is that we always want to be able to vote,” said Carine Smith Ihenacho, chief governance and compliance officer at the Norwegian fund.

“We do, however, own shares in a number of companies where shareholder rights are weaker than we would like... voting rights are not the only way to exert influence though,” Smith Ihenacho added in a statement to Reuters.

Shares in Volkswagen, which some analysts have said could unlock value for its own stock by listing Porsche AG, were little changed at 1556 GMT, after rising 3% in premarket trade.

Uncertainties around the governance of the two companies could explain the lack of enthusiasm from markets, Ingo Speich, head of sustainability and corporate governance at top-20 Volkswagen investor Deka Investment, said.

“If the splitting off of two companies improves the management quality and strategic direction of a business, that will be reflected in the valuation,” Speich said. “It is fundamentally right that Porsche AG becomes more independent - but this is not an independent set-up.”

Oliver Blume will split his working capacity 50-50 between the two companies, according to the prospectus.

He will be paid entirely by Volkswagen until the end of the year, and receive around 60% of his salary from the group after that with the remaining 40% to be paid by Porsche AG, reflecting the different remuneration levels at the two firms.

Analysts have compared Porsche AG stock to Ferrari, which has a market capitalisation of 38 billion euros but an operating margin of 24% to Porsche’s 17-18%. The German carmaker is targeting a 20% margin and is far ahead in electric vehicles.

Porsche AG will pay a first dividend of 911 million euros plus an extra dividend of 0.01 euros per preferred share in 2022, the prospectus said, in another nod to its famed 911 model. Porsche AG’s capital is being split into 911 million shares for the listing.

“Investors are queuing up. If the Porsche IPO goes well, one could imagine placing other parts [of Volkswagen] such as Audi on the stock exchange,” auto expert Arndt Ellinghorst of data analytics firm QuantCo said.

The subscription period for private and institutional investors is expected to run from Sept. 20 to Sept. 28, with shares offered to private investors in Germany, Austria, Switzerland, France, Italy and Spain.

Total proceeds from the sale will be 18.1-19.5 billion euros and could help Volkswagen fund its electrification drive.

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