FRANKFURT -- Wendelin Wiedeking, the outspoken chief executive of Germany's legendary sports car maker Porsche, is anything but a devout proponent of shareholder value.
But investors holding Porsche non-voting stock never dreamed the otherwise conservative businessman would spend billions to protect the independence of Europe's largest carmaker, Volkswagen, via a 20 percent stake purchase.
Privately controlled but publicly listed Porsche has taken the Frankfurt Stock Exchange operator to court over requirements for index-listed firms to report quarterly results.
Wiedeking has told the media his annual salary is "nobody's business" and condemned the idea of publishing it as "socialist".
Earlier this year he told investors Porsche's relatively poor dividend yield -- just 0.8 percent when paid last year -- was a necessary evil to ensure it could finance future growth and development.
Most minority shareholders kept quiet as Porsche's market capitalization accelerated from some 380 million euros when Wiedeking took the wheel in 1992 to more 12 billion euros, or about $14.5 billion, just days ago.
But following Sunday's announcement that the niche player would plough essentially all its cash reserves into building the biggest individual stake in mass carmaker Volkswagen, some investors are starting to feel as if they've been dealt a lemon.
"Porsche makes it very clear that shareholders come dead last," said Henning Gebhardt, head of equities at Germany's largest retail fund manager DWS. "Wiedeking had already said as much before, and now he has impressively proven it."
Gebhardt, who manages some 5 billion euros in assets, called the decision "completely beyond comprehension".
Porsche shares sank as much as 11.8 percent on Monday, a drop so dramatic that investors have to go back to before the Sept. 11 attacks four years ago to find a steeper one.
GERMANS FIGHT 'LOCUSTS'
Porsche defends the move, saying it is buying the stake to secure its ties over the long term to Volkswagen, both a key development partner as well as a significant supplier for roughly 30 percent of Porsche's sales volume.
Although Volkswagen builds the chassis for Porsche's best-selling Cayenne offroader and works with Porsche to develop hybrid engines, an industry consultant who declined to be named doubted that the two joint projects could justify what would be a 3.3 billion euro investment, or $3.97 billion.
"It cannot be that alone. You secure the long-term future of a project before it goes into serial production and not some three years into its life cycle unless there were more projects to come," he said, dismissing the hybrid partnership as well.
"Rather than getting a comparable return for the cash invested, Porsche shareholders now will have to settle for years of VW's dividend ratio instead. It looks as if politics are playing an issue," the consultant continued.
Porsche, historically tied to Volkswagen ever since founder Ferdinand Porsche first designed the VW Beetle for the Nazis, said its investment would prevent a hostile takeover of VW by investors not committed to the carmaker's long-term interests.
Wiedeking's rhetoric of a "German solution" to ensure Volkswagen's independence recalls this summer's debate over the role of foreign hedge funds and private equity firms in Germany -- demonized by leftist politicians as "locusts".
"Volkswagen doesn't need it. They can assert themselves in the market," DWS's Gebhardt said, "it looks as if it's a step back towards Germany Inc."
Deutsche Bank downgraded its rating to "sell" and slashed its price target by a quarter to 550 euros in a research note entitled "You Will Never See the Cash!" Dresdner Kleinwort Wasserstein called the move strategic "heresy".
In a research note that placed the stock on a trading sell, Dresdner Kleinwort wrote that there was hardly any business logic in the deal since VW's return on capital employed amounts to just 5 percent versus Porsche's roughly 26 percent.
"This move is a slap in the face of minority-preference shareholders," DrKW said.