Porsche board set for showdown over Qatar, VW

By Hendrik Sackmann

STUTTGART, Germany (Reuters) - Two rival factions that control indebted automotive holding group Porsche SE are set for a showdown that could decide on the planned merger with majority-owned Volkswagen.

A source familiar with the matter told Reuters on Friday that Chairman Wolfgang Porsche called an extraordinary supervisory board meeting for July 23 to discuss a possible sale of a stake in Porsche SE to Qatar worth over 5 billion euros ($6.97 billion).

The source said the concept included the acquisition by Qatar of a stake in Porsche SE as well as purchasing options on VW stock which are still held by Porsche. The market had previously speculated on a deal valued around 2-3 billion euros.

The source said Porsche management has already "concluded" its negotiations with the Gulf investor and was ready to present a concept to its supervisory board.

Although the Porsche and Piech families would relinquish for the very first time total control over the company, the fresh funds would reduce its net debt by more than half and considerably strengthen the bargaining position of embattled Chief Executive Wendelin Wiedeking.

Under fire, the Porsche CEO hopes to win a bitter power struggle waged against powerful Volkswagen Chairman Ferdinand Piech, a part owner of Porsche SE who holds a blocking minority together with his brother, and force a merger with cash-rich VW at least on equal terms.

"This would most likely also enable a combined and integrated Porsche/VW Group to keep it's A- rating at S&P and Moody's too, which is reportedly a high priority of VW," UniCredit debt analyst Sven Kreitmair wrote in a note.

ALTERNATIVE PLAN