Glass Lewis says “Yes” vote on Fiat-Chrysler merger brings benefits

Article by Christian A., on July 30, 2014

Glass Lewis is recommending that Fiat investors vote “Yes” to a merger between the Italian carmaker and Chrysler Group at a meeting on Aug. 1. While a “Yes” vote would literally increase the voting power for main shareholder Exor, the proxy advisor said benefits outweighs those concerns.

Such advice from Glass Lewis and other large proxy advisors are usually taken into heart by international investors – making their voice an important factor in determining whether Fiat could get the two-thirds majority needed for approval of the merger.

In contrast, proxy advisors ISS and Frontis Governance have recommended a “No” vote, saying it would decrease shareholder rights and allow Exor to tighten its control of the carmaker.

But for Glass Lewis, such concern should be countered by bigger benefits to shareholders. "The proposed reincorporation is, on balance, in the best interests of shareholders as the benefits of access to deeper and more robust capital markets and improved governance standards outweigh our concerns regarding the potential increase in Exor's voting power," Glass Lewis said.

While Exor owns a 30-percent stake in Fiat Chrysler, its voting power could increase to up to 46 percent via a loyalty scheme established as part of the merger to reward long-term investors.

Should shareholders vote “No” against the merger, such event could derail or complicate Fiat Chrysler’s plans to list in the United States and obtain funds for its five-year business plan.

The merged FCA is seen to be based in London and have its tax domicile in the United Kingdom. Fiat-Chrysler chief executive Sergio Marchionne recently expressed confidence that shareholders would approve the merger. [source: Reuters]

If you liked the article, share on:

Comments

Recommended

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries