Porsche, the German maker of luxury sports cars, has launched an official bid to acquire Volkswagen, Europe's largest car maker.
Porsche announced in late March that it would exercise an option to buy an additional 3.6% stake in VW. The additional shares raised Porsche's interest in VW to 30.9%, effectively obliging it under German law to launch a public takeover for all outstanding VW shares.
Under an offer to run until May 29 Porsche said it would propose €100.92 per ordinary share, which is well below VW's current share price of around €112.
Analysts have predicted that few shareholders were likely to take up Porsche's offer, adding that Porsche in effect has no intention of buying all of VW's share capital just yet. They see the move as a clever way for Porsche to increase its stature in VW without being forced to pay for any additional shares.
