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| Prosecutors raid Porsche offices | Prosecutors raid Porsche offices |
| (20 minutes later) | |
| The offices of German luxury carmaker Porsche have been raided by federal prosecutors probing the alleged market manipulation of Volkswagen shares. | The offices of German luxury carmaker Porsche have been raided by federal prosecutors probing the alleged market manipulation of Volkswagen shares. |
| Porsche had built up a stake of 51% in VW in an attempt to launch a takeover of Europe's biggest carmaker. | Porsche had built up a stake of 51% in VW in an attempt to launch a takeover of Europe's biggest carmaker. |
| The two have subsequently agreed to a merger, ending months of bitter feuding, which will take place in 2011. | The two have subsequently agreed to a merger, ending months of bitter feuding, which will take place in 2011. |
| The carmaker denied the accusations and said that it would co-operate fully with the prosecutors. | The carmaker denied the accusations and said that it would co-operate fully with the prosecutors. |
| Failed takeover | Failed takeover |
| "On Thursday morning, officers from Stuttgart prosecutors entered the company's offices with search warrants. | "On Thursday morning, officers from Stuttgart prosecutors entered the company's offices with search warrants. |
| "The prosecutors suspect a breach of public disclosure requirements and market manipulation," Porsche said. | "The prosecutors suspect a breach of public disclosure requirements and market manipulation," Porsche said. |
| Under former chief executive Wendelin Wiedeking, who resigned last month, Porsche built up a majority stake in the much larger VW, but failed in its attempt to force a full takeover. | Under former chief executive Wendelin Wiedeking, who resigned last month, Porsche built up a majority stake in the much larger VW, but failed in its attempt to force a full takeover. |
| Porsche made huge profits on its VW shares, leading some commentators to describe the firm as a hedge fund with a carmaker tacked on the side. | |
| In fact, the share price rises contributed 6.84bn euros to the company's pre-tax profit of 7.34bn euros in the first three months of this year. | |
| However, the onset of the global economic crisis put paid to the company's attempts to push its shareholding in VW to 75%. | |
| As a result of its failed takeover, Porsche was saddled with huge debts. | |
| Family ties | |
| In order to shore up its finances, the carmaker announced last week that the state of Qatar would take a major stake in the company. | |
| Qatar will eventually become the carmaker's third biggest shareholder, behind the Porsche and Piech families and the German state of Lower Saxony. | |
| Under the terms of the merger with VW finally agreed last week, VW will initially buy a 42% stake in Porsche by the end of this year for 3.3bn euros ($4.7bn; £2.8bn). | |
| The deal means that Porsche will now in effect become the 10th brand in the VW family, joining the likes of Audi, Seat and Skoda. |