Shares in German automaker Porsche SE, in which Qatar owns 10 per cent, soared on Monday after a U.S. judge dismissed a hedge fund lawsuit seeking more than $2 billion in damages, removing a key obstacle to a merger with Volkswagen.
At 0819 GMT shares in Stuttgart-based automaker Porsche were 10 per cent higher, while shares in Volkswagen gained 3.5 per cent.
"We regard this as material positive news for Porsche shareholders as the biggest risk to the merger with VW has been removed," Credit Suisse analysts said.
The claims had delayed attempts by Volkswagen to fold Porsche into its operations next year and opens the door for a planned rights issue by Porsche.
"(This ruling) clearly paves the way for the planned rights issue at Porsche SE to raise 5 billion euros ($6.7 billion) in the first half of 2011," DZ Bank analyst Michael Punzet said.
Late last week, U.S. District Judge Harold Baer said the funds, led by Elliott Associates and Black Diamond Offshore Ltd, could not maintain securities fraud claims based on Porsche's alleged "short squeeze."
Claims were also dismissed against former Porsche Chief Executive Wendelin Wiedeking and his finance chief Holger Haerter.
The hedge funds alleged they were victimized when Porsche quietly bought nearly all the freely traded ordinary shares of Volkswagen as part of a plan to take over the company, contrary to its public statements that it had no plans to do so.
When Porsche revealed its holdings in October 2008, shares of VW soared, briefly making the company the world's biggest by market value.
This caused losses for the hedge funds, which had bet on a decline in price.
Baer dismissed most of the plaintiffs' claims with prejudice, meaning they cannot be brought again.
The ruling came after the closing of the market on Thursday. On Friday the German stock market was closed for New Year.
On Sunday Volkswagen said it had extended the contract of Chief Executive Martin Winterkorn until 2016.