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Advisors call for Fiat-Chrysler merger rejection

4K views 32 replies 13 participants last post by  MoparNorm 
#1 ·
#6 ·
Shareholders have also "right of withdrawal", so if they don't agree with the terms and conditions of the project, and so voting against, than they have the right to receive Euro 7.727 per share (price that was calculated as average closing shares price at Borsa Italiana stock market for the last 6 months).

There is also another condition, that shareholders that exercise the "withdrawl right" and creditors opposing to the merger should not exceed a total payable amount of Euro 500 millions.

The information can be found here: http://www.fiatspa.com/en-US/investor_relations/shareholders/FiatDocuments/FIAT_AVVISO_CONVOCAZIONE_ASSEMBLEA_ENG.pdf
 
#7 ·
Int said:
In the U.S. it's investment companies voting most of the shares of major corporations so nickel-dime stockholders have little say in any case.
Click on the link above. The investment companies, the ten largest only control 46%.
Number ten is less than 2%, so from 11 down, in the remaining 56%, the ownership is likely small investors.
However I agree, it would be very difficult for anyone to rally the 56% of small owners to vote as a block, or to have reason to vote as a block. Unless...one of the other major owner blocks tries to organize a takeover, ala Warren Buffet or Carl Ican.
Most interesting to me is that Fiat SPA only owns 2+% of themselves, showing they may have gone to the well, one too many times and have too much outstanding stock.
That is why the merger consolidates the voting power of the family's 30%, so they can once again regain majority voting power.
It's an overt attempt to dilute the power of the other 70% of the owners.
 
#9 ·
MoparNorm said:
Click on the link above. The investment companies, the ten largest only control 46%.
Number ten is less than 2%, so from 11 down, in the remaining 56%, the ownership is likely small investors.
However I agree, it would be very difficult for anyone to rally the 56% of small owners to vote as a block, or to have reason to vote as a block. Unless...one of the other major owner blocks tries to organize a takeover, ala Warren Buffet or Carl Ican.
Most interesting to me is that Fiat SPA only owns 2+% of themselves, showing they may have gone to the well, one too many times and have too much outstanding stock.
That is why the merger consolidates the voting power of the family's 30%, so they can once again regain majority voting power.
It's an overt attempt to dilute the power of the other 70% of the owners.
Maybe that 2% is some sort of reserve for stock manager's options?
Other than that, there seems to be no reason for FIAT to hold any issued stock.

The intent to limit the voting power of any short-term "stock exchange pirate" has been openly proclaimed by FCA. The rationale is that they don't want the new group to be so pressured by market conditions that it will limit their industrial decisions (i.e. stock value taking a dive because they are withholding dividends in the medium term). They have an aggressive plan and they need shareholder stability: they can't afford to be distracted by nickel and dime shareholders and shark short-traders that will start dumping shares and run values down, exposing FCA to a hostile takeover. This way, the most strategic and stable shareholder (EXOR) hold 46% of the voting rights, thus making it more difficult for someone else to enact some hostile maneuver.
 
#10 ·
Maybe that 2% is some sort of reserve for stock manager's options?
Other than that, there seems to be no reason for FIAT to hold any issued stock.
If you own a corporation and you want to keep control of it, you must own stock. If Fiat owns no stock, they would have zero ownership, unless the stock was Preferred Stock only, which is strictly for dividends, not ownership.
 
#17 ·
That is odd!
Is there language in the meeting agenda that allows a quorum to be called as a no vote?
If there isn't a quorum, can the vote be suspended and a vote taken with only the majority of those present voting?
Interesting...
 
#20 ·
There is much going on behind the scenes with FCA and the stock offering.
 
#25 ·
At 31 december 2014 the shareholders where

Exor S.p.A. - 30,06%
Baillie Gifford & Co - 2,64%
Vanguard International Growth Fund - 2,26%
Norges Bank - 2,01%
Other institutional shareholders UE - 17,10%
Other institutional shareholders extra UE - 21,80%
Other shareholders - 21,37%
Fiat S.p.A. owned shares - 2,76%

So "small" shareholders are not so much.

They will use for the new company the same vote rules that is in use in CNH Industrial n.v., "long term" shareholders (>= 3 years) will have two vote rights per share.
That is allowed by dutch laws, so that is one of the reasons why the company will be registered in The Netherlands.

There are also rumors that Fiat sent a request to Banca d'Italia for authorize Fga Capital, joint venture between FCA and Credite Agricole, to became a bank.
Doing that to be able to acceess to credit lines iussed by European Central Bank, like, for example, in the last years VW, PSA and Renault done. VW bank took a Euro 1 billion loan at 1%.
 
#26 ·
If you own a corporation and you want to keep control of it, you must own stock. If Fiat owns no stock, they would have zero ownership, unless the stock was Preferred Stock only, which is strictly for dividends, not ownership.
No, there's no need for FIAT to hold any stock, common, preferred or otherwise.
EXOR owns shares in FIAT (a "controlling" stake of 30%), so there's no need for FIAT itself to hold shares of FIAT.
A long time ago, the Agnelli family controlling stake was moved to EXOR (the Angelli family investment fund) that's the entity that calls the shots in lieu of a direct participation by the family in FIAT SpA.
 
#28 ·
In that context, why did Fiat retain that 2%?
 
#27 ·
OT, how do we get back to the old skin, this one is killing me! The new features are cool though.

Does it work on FireFox now? I'll check.
 
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#30 ·
That would be the case, of the unsold shares, such as a company needing to raise money and selling shares to do so, by placing them either on the open stock market, or selling them in a private sale. Most companies will retain at least 51%, to maintain control.
A company with only 2% of it's own stock, or only 2% ownership, is an indication of a poorly run company which at one point in time, or over several points in time, was desperate to survive and sold off 98% control, to do so.
EXOR obviously bought 30%, as well as other investors, who purchased much smaller percentages.
I just found it interesting that the "controlling" family, does so from such a minority position. It always creates the potential of losing control. Obviously it worries them as well, hence the attempt to capture more voting power by the structure of the new agreement they are proposing.
 
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#32 ·
There are a lot of factors involved in self-ownership of stock. IBM keeps buying its own stock, Bob Cringely says it's because they pay a 2% dividend and Treasury lends to them at 1%; often CEOs love stock buybacks because they are lavishly rewarded when the stock price goes up. Sometimes companies that believe they will do much better in future buy their own stock too, this is not uncommon since most analysts spend more time playing with spreadsheets and looking at BMW brochures than actually following company doings.
 
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