Germany's Lower Saxony state buys more VW shares to protect blocking minority

2007-05-29 12:02:47 -

HANOVER, Germany (AP) - Volkswagen AG's second-biggest shareholder, the state of Lower Saxony, said Tuesday it has increased its stake slightly in an effort to protect its blocking minority at the automaker.

The state, which is home to Volkswagen's Wolfsburg headquarters, bought 367,000 VW shares last Thursday for �41 million (US$55.2 million), said Birgit Diers,

a spokeswoman for the state finance ministry.

That raised its stake to 20.36 from 20.23 percent. At Volkswagen, a 20 percent stake gives the holder a blocking minority.

Lower Saxony made its move ahead of a planned Volkswagen issue of share options to employees in July, which would raise the number of shares, thus reducing the state's proportional holding, Diers said.

�Without buying the shares, we would have gone below the 20 percent mark in July,� Diers said.

Lower Saxony is the second-biggest shareholder behind automaker Porsche AG, which has built up a stake of more than 30 percent in Volkswagen.

Volkswagen shares traded up nearly 1.9 percent Tuesday at �114.00 (US$153.38) _ above the �112.60 (US$151.50) per share that Lower Saxony paid last week.