VOLKSWAGEN shares rose slightly yesterday after the carmaker said it was targeting a valuation of up to €75bn (£65.8bn) for sportscar brand Porsche, in potentially Europe's third biggest IPO ever.

Porsche aims to win over investors with its stable brand and high operating margins even as the stocks of other luxury carmakers like Ferrari and Aston Martin have suffered this year amid the tumult in European stock markets.

The valuation announced on Sunday of €70bn-€75bn is slightly below some investors' estimates of up to €85bn, but still far outstrips the valuation of other German carmakers like Mercedes- Benz' €61bn.

While the IPO could still be pulled before trading starts on 29 September,

Porsche AG's chief financial officer Lutz Meschke said in early September this would only happen in the event of new "severe geopolitical problems".

Volkswagen said on Sunday night it would price preferred shares in the flotation of Porsche AG at €76.50 to €82.50 per share. A prospectus with further details on the listing is expected to be published tomorow afternoon.

The carmaker plans on placing up to 12.5 per cent of Porsche's share capital with investors in the form of preferred shares, which do not carry voting rights.

Cornerstone investors have laid claim to almost 40 per cent of the share capital on offer: Qatar Investment Authority has committed to buying 4.99 per cent, while Norway's sovereign wealth fund and T Rowe Price will purchase shares worth €750m.

Reuters

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