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Porsche Cleared in Investor Lawsuit Following VW Takeover Attempt

Motor Trend logo Motor Trend 3/17/2014 Alex Nishimoto

Porsche's failed takeover of Volkswagen is now a distant spec in the company's rearview mirror, but the sports car maker is still dealing with the resulting lawsuits filed by hedge funds, which allege that Porsche cloaked its plan to acquire the German auto giant. Now, Reuters reports that one of those lawsuits has been thrown out.


A German court dismissed a lawsuit filed by Viking Global Investors, Glenhill Capital, Greenlight Capital, and more than a dozen other hedge funds. The judge ruled that it could not be proven that Porsche SE, Porsche AG's investment arm, acted deliberately to harm the hedge funds in the case. The lawsuit sought 1.36 billion euros ($1.9 billion) in damages. With the ruling, the other hedge fund lawsuits against Porsche seeking more than 4 billion euros don't look promising. MotorTrend Image© Provided by MotorTrend MotorTrend Image

In March of 2008, Porsche SE denied the company was planning a takeover of Volkswagen, but it revealed seven months later that it controlled 74.1 percent of VW's common stock, which was just shy of the 75 percent needed for a takeover. In the wake of the announcement, VW shares skyrocketed as traders who sold the stock short tried to get it back. After that, Porsche's takeover plans went bust with the global recession, and VW moved in to acquire 49.9 percent of the Stuttgart-based company. A merger between the two companies was planned, but faced repeated delays. In the end, VW bought Porsche outright in August 2012.

Porsche SE still holds a 50.7-percent controlling stake in Volkswagen, but says it may expand its assets beyond VW shares once the lawsuits are put to rest.

Source: Reuters

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