Mumbai: German sports-car maker Porsche AG has exercised an option to raise its stake in Volkswagen AG to 31 per cent from 27.3 per cent, triggering a requirement for a takeover bid for Europe''s biggest carmaker. The company has also arranged a €35-billion credit line to finance the takeover.

Porsche, the world''s most profitable carmaker based in Stuttgart, Germany, said it would offer €100.92 for Volkswagen''s ordinary share, 14 per cent less than the March 23 closing price in Frankfurt, valuing the company at €42.7 billion ($56.7 billion).

Porsche will complete the acquisition on 28 March. German law requires a takeover offer to all shareholders once an investor passes the 30 per cent threshold.

If Porsche opts to bid now, it is free to make future Volkswagen stake purchases as it deems fit. Once having made the minimum legal bid to all shareholders, Porsche is no longer required by law to present further purchase offers, the company said.

Volkswagen chairman Ferdinand Piech whose family controls Porsche, has steadily been increasing his influence since Porsche first bought a stake a year and a half ago.

Porsche has also secured a 35 billion-euro line of credit to finance the purchase of Volkswagen, though it doesn''t want a majority stake at this time, reports quoted Frank Gaube, a Porsche spokesman, as saying.

The credit facility has been arranged by ABN Amro Bank NV, Barclays Capital, Merrill Lynch International, UBS Ltd. and Commerzbank AG, Porsche said.

Volkswagen is Porsche''s largest supplier. The two companies build the Porsche Cayenne, Volkswagen Touareg and Audi Q7 sport-utility vehicles at Volkswagen''s plant in Slovakia. Volkswagen will build the body for Porsche''s planned Panamera four-door model at its Hanover, Germany, factory.