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Proxy war looms over VW control
Christian Wulff, the Christian Democrat who leads the north German state, is considering whether to oppose a likely decision by Porsche, the car maker that is VW's largest shareholder, to seek the chairmanship and another supervisory board seat.
The secretly planned meetings show the battle for control at Europe's largest car maker is reaching new levels as the two shareholders - who together own half of VW - try to gain outside support for their positions.
A Porsche-backed boardroom coup last month forced out Bernd Pischetsrieder, VW's chief executive, who was backed by Lower Saxony. "It would be unprecedented in Germany if there is a proxy battle. It would be war," said one large shareholder, due to meet Mr Wulff in January.
"If he is having another round of meetings then it looks like he is serious about fighting this."
Another shareholder with a meeting with Mr Wulff in February said: "I don't know what his precise agenda is but he hasn't invited me to talk about the weather."
The meetings - with international and German investors - are likely before a crucial supervisory board meeting in February.
That will be the last sitting before board nominations are made for April's annual meeting.
Shareholders warned that, in spite of the meetings, Mr Wulff might decide not to fight.
A former adviser to the state Premier said Mr Wulff should admit defeat: "His power is slipping away and his argument is weak. Porsche will soon be in control."
The meetings come against the backdrop of Porsche taking an increasingly aggressive stance to both VW and Lower Saxony.
Wendelin Wiedeking, Porsche's chief executive, changed tack this month and said his company wanted at least three if not four supervisory board seats, instead of its current two.
Asked if a deal in January with Mr Wulff - that neither Porsche nor Lower Saxony should hold the chairmanship - was still valid, Mr Wiedeking said: "The rules of the game have changed." Speculation is also mounting that Porsche might launch a full takeover for VW, or increase its stake to more than 30 per cent soon. Porsche recently raised its holding in VW to 27.4 per cent; considerably more than Lower Saxony's 20.8 per cent.
But because of the VW law - which is at present being legally challenged by the European Commission but not expected to be changed until after this year's annual meeting - both are capped at 20 per cent of the voting rights.
This means that at April's meeting, Porsche and Lower Saxony would cancel each other out, leaving a straight fight in order to gain the most votes among other investors.
"Because of the VW law it is probably the last chance to counter Porsche," said one investor.
A spokesman for Lower Saxony said such meetings were not known to him and he repeated a denial of previous meetings. Five shareholders, however, said such meetings had taken place.
from www.theaustralian.com.au
- Richard Milne, Berlin
- December 19, 2006
Christian Wulff, the Christian Democrat who leads the north German state, is considering whether to oppose a likely decision by Porsche, the car maker that is VW's largest shareholder, to seek the chairmanship and another supervisory board seat.
The secretly planned meetings show the battle for control at Europe's largest car maker is reaching new levels as the two shareholders - who together own half of VW - try to gain outside support for their positions.
A Porsche-backed boardroom coup last month forced out Bernd Pischetsrieder, VW's chief executive, who was backed by Lower Saxony. "It would be unprecedented in Germany if there is a proxy battle. It would be war," said one large shareholder, due to meet Mr Wulff in January.
"If he is having another round of meetings then it looks like he is serious about fighting this."
Another shareholder with a meeting with Mr Wulff in February said: "I don't know what his precise agenda is but he hasn't invited me to talk about the weather."
The meetings - with international and German investors - are likely before a crucial supervisory board meeting in February.
That will be the last sitting before board nominations are made for April's annual meeting.
Shareholders warned that, in spite of the meetings, Mr Wulff might decide not to fight.
A former adviser to the state Premier said Mr Wulff should admit defeat: "His power is slipping away and his argument is weak. Porsche will soon be in control."
The meetings come against the backdrop of Porsche taking an increasingly aggressive stance to both VW and Lower Saxony.
Wendelin Wiedeking, Porsche's chief executive, changed tack this month and said his company wanted at least three if not four supervisory board seats, instead of its current two.
Asked if a deal in January with Mr Wulff - that neither Porsche nor Lower Saxony should hold the chairmanship - was still valid, Mr Wiedeking said: "The rules of the game have changed." Speculation is also mounting that Porsche might launch a full takeover for VW, or increase its stake to more than 30 per cent soon. Porsche recently raised its holding in VW to 27.4 per cent; considerably more than Lower Saxony's 20.8 per cent.
But because of the VW law - which is at present being legally challenged by the European Commission but not expected to be changed until after this year's annual meeting - both are capped at 20 per cent of the voting rights.
This means that at April's meeting, Porsche and Lower Saxony would cancel each other out, leaving a straight fight in order to gain the most votes among other investors.
"Because of the VW law it is probably the last chance to counter Porsche," said one investor.
A spokesman for Lower Saxony said such meetings were not known to him and he repeated a denial of previous meetings. Five shareholders, however, said such meetings had taken place.
from www.theaustralian.com.au
