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Fiat Shareholders Came Close to Merger Upset

September 4, 2014
2 min to read


Fiat SpA shareholders came close to derailing a corporate reorganization on which the creation of the combined Fiat Chrysler Automobiles group depends, according to data the company released Thursday, reported The Wall Street Journal.


Investors in the Italian auto maker last week tendered shares worth €464 million ($608 million) as they exercised their right to sell their stock to the company, an amount just shy of the €500 million limit that Chief Executive Sergio Marchionne had set for any payout.


Mr. Marchionne had said that he would scrap the reorganization if the payout was any larger, at least temporarily halting the creation of Fiat Chrysler.


With the reorganization now going ahead, the merged company plans to list shares on the New York Stock Exchange Oct. 13, a move designed to give Fiat Chrsyler more flexibility in financing a multibillion-euro expansion plan involving the rollout of several new models.


Fiat also said Thursday that it would sell an unspecified amount of new bonds.


The reorganization involving Fiat and its 100%-owned Chrysler unit includes the merger of Fiat with a Dutch entity which will take the Fiat Chrysler name.


Fiat plans to move its legal headquarters to Amsterdam and take up tax residency to the U.K. as well as have its primary stock market listing in New York.


From Sept. 5 until Oct. 6, Fiat will offer the tendered shares back to shareholders at the predetermined exit price of €7.73 a share. Fiat shares traded in Milan at €7.54 early Thursday.


Fiat said the sale of new debt would come in the form of the reopening of a July bond issue.


At that sale, Fiat sold €850 million in bonds maturing in 2022 that pay 4.75%. The final terms and value of the new bond sale will be based on market conditions at the time of pricing, Fiat said.

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