Volkswagen is in talks with major Swedish institutional investors about being the cornerstone shareholders in the dual listing of its trucks unit Traton in Stockholm and Frankfurtit has been reported.
The discussions could result in more than one cornerstone investor being brought on board and are for each investor to take a $AUD 240 million to $480 million (171.21-342.42 million Euro) stake, confidential sources revealed this week.
Cornerstone investors are institutions that are invited to subscribe to shares ahead of an IPO to boost its popularity and often serve as a seal of approval for other investors. Securing such investors is popular among Nordic companies.
Swedish investor Första AP-fonden had conformed it has been asked about being an anchor investor, according to its head of equities Olof Jonasson, but declined to comment on the stake size or price.
“We have been approached but I couldn’t really tell you anything about the details… Our interest… would be about business potential and valuation and all those things put together,” said Jonasson, whose fund is also a large owner of Swedish rival AB Volvo.
It wasreported last week that VW expects to sell shares worth $AUD7.98 billion-$AUD 9.6 billion in an April listing that could value Traton about $AUD 30 billion to $AUD 40 billion.
At this size and value, the IPO could potentially become Germany’s and Sweden’s biggest new share offering in 2019, but the sources said its size had not yet been finalised and would depend on market conditions.
AP4 head of equities Per Colleen said he could not confirm any of the details but added: “Anything of that size, we will have a serious look at”.
Traton is the umbrella name for MAN, Scania and VW brands, but Swedish company Scania is by far its most valuable part, with superior profitability and stability.
Scania was listed in Stockholm until 2014, when its then largest investor VW took it private in a deal that valued it at about 17.9 billion euros, but many Swedish investors that were squeezed out said then that the offer undervalued the group.
One of the source said that Swedish funds were keen for a substantial stake in the Traton IPO as they expected it to have a large influence on the automotive and engineering-heavy Stockholm blue-chip index that they try to outperform.
Traton CEO Andreas Renschler would not comment when asked about the plans but told analysts at the firm’s capital markets day:ha the company wants to be the most profitable vehicle player and to have access to all global profit pools.
If markets are deemed favourable, Volkswagen would publish a so-called intention to float (ITF) in the second half of March followed by the listing four weeks later, the sources added.
Traton aimed to float on the Frankfurt stock exchange with a possible secondary listing in Sweden, the home of its Scania brand, the sources said. “Stockholm would help Traton attract local, long-term oriented investors in Sweden,” one source said.
Traton might also bring in a so-called cornerstone investor before the listing, although no deal had been struck, the sources said.
VW plans to build a global trucks business by integrating its MAN and Scania divisions to challenge other global truck giants Daimler and Volvo.
A flotation could allow Traton (Volkswagen Truck & Bus) to build a war chest to deepen its relationship with Navistar in the U.S. truck where it now owns a 16.85 percent stake.
JP Morgan, Goldman Sachs, Deutsche Bank and Citi have been mandated as global coordinators for the listing.
Barclays, Bank of America, BNP, SEB, Unicredit are acting joint bookrunners, while Commerzbank, HSBC, Societe Generale and LBBW are acting as co-leads.