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German regulators approve Porsche's required bid for Volkswagen

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BERLIN (AP) _ Germany's financial regulators have approved automaker Porsche AG's takeover offer for Volkswagen AG, which it was obligated to make after acquiring more than 30 per cent in the company, Porsche said Monday.

But Porsche has said it doesn't plan to acquire Wolfsburg-based Volkswagen outright.

According to a document on Porsche's website, it has improved its offer for preferred shares to 65.54 euros (US$89.42) each from 65.45 euros. It is still offering 100.92 euros ($137.69) per ordinary share, which is more than 11 per cent below the current market price.

Stuttgart-based Porsche triggered the mandatory takeover offer by raising its stake in Volkswagen higher than 30 per cent _ a move aimed at shielding the automaker from the possibility of a foreign takeover attempt.

The offer gives the company the chance to purchase Volkswagen shares without making another takeover bid.

A German law that limits Volkswagen shareholder voting rights to a maximum of 20 per cent, no matter how many shares are held, is expected to be ruled unlawful by the European Union. That ruling would have left VW exposed to takeover attempts.

But with Porsche now holding 31 per cent of the company and the German state of Lower Saxony a nearly 20 per cent stake, the car maker is now shielded.

Volkswagen shares fell 0.08 per cent to close at 111.39 euros ($152.13) in Frankfurt trading, while Porsche shares gained 0.73 per cent to 1,233.70 euros ($1,684.93).

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German regulators approve Porsche's required bid for Volkswagen
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