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Volkswagen is considering an audacious bid for Porsche’s automotive business, in an extraordinary twist in the on-going battle for control between the two companies.

VW's management is reported to be weighing up the option of buying Porsche AG, to relieve holding company Porsche SE of debt.

Read the story of Fiat's shock bid for Opel here

Such a move would be a remarkable about-turn; three and a half years ago Porsche began its own attempts to take over VW.

The plan emerged as shareholders were set to convene at VW’s annual meeting on Thursday.

Porsche recently revealed it has a net debt of nine billion euros (£8 billion), which analysts say it is having trouble servicing.

However, a Porsche spokesman told the Financial Times newspaper that he was unaware of the takeover plans, and said that the €280m (£251 million) it was about to receive in VW dividends and its operating profit would be enough to make its interest payments this year.

Porsche has reaped huge profits in the past years from controversial VW option trades. It has made 6.8 billion Euros (£6.1 billion), more than double its revenue, from its VW takeover in the past six months alone. However, analysts have said that most of these profits are paper gains and cannot be easily converted into cash.

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