Fiat denies reports that some investors exercised exit rights

Article by Christian A., on August 10, 2014

Fiat dismissed reports that a good number of shareholders have exercised their exit rights over its merger with Chrysler. Fiat shares fell to a seven-month low on Tuesday, partially due to concerns over the merger and also to a media report in China over an anti-trust probe targeting Chrysler's Jeep unit and other Western carmakers in China.

Two traders remarked that price decline might be partly attributable to concerns that shareholders who voted against the merger would exercise their right to sell the stock.

The merger – resulting to a company that will be named Fiat Chrysler Automobiles NV and will be headquartered in London and be primarily traded in New York – received the green light from Fiat shareholders at a special meeting on Aug. 1 by a two thirds majority.

Around 8 percent of Fiat shareholders voted against the merger. Fiat has said that if enough of them exercise their rights to sell by Aug. 20, and the total amount needed to be paid for those rights to shareholders and creditors top EUR500 million ($669 million), the merger could still fail.

As for the report, Fiat said that the term for the exercise of the cash exit rights has already started, and the carmaker has yet to receive notices of exercise of the cash exit rights.

Technically, the merger could fail if just 5 percent of all Fiat shareholders exercise their rights to sell out, although that should be remote. Investors exercising the right will receive EUR7.727 a share.

George Galliers, an analyst at International Strategy & Investment, remarked that the sell-off is caused by a misunderstanding regarding the merger, including an assumption that investors resisting the marriage will seek a buyout and place the cost cap in range. [source: Reuters]

Topics: fiat

If you liked the article, share on:

Comments

Recommended

Audi’s intention to bring out the Renn Sport Racing version of the Q5 was made clear when it unveiled the Audi SQ5 at the 2017 Detroit Motor Show early this...
by - July 22, 2017
Kia’s Sorento midsize sports utility vehicle is reaching its mid-cycle for the 2018 model year. Thus, its fans, enthusiasts and satisfied customers are expecting the Sorento to receive an update...
by - July 22, 2017
The Lotus Evora Sport 410 astonished the world after arriving as the more powerful and lighter edition of the already impressive Evora 400. Now, Lotus Cars is throwing in another...
by - July 22, 2017
The Europe-bound WRC hatch developed by Toyota and Gazoo Racing team will be limited to just 400 examples as reported by AutoCar this week. Otherwise known as Gazoo Racing Masters...
by - July 21, 2017
Even cops get excited when they’re assigned to drive the best cars in the market. In Austria, police officers drive around in a Porsche 911 Carrera while in Milan, authorities...
by - July 21, 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