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Fiat May Sell Up To $1.04B In Stock With U.S. Listing

September 4, 2014
3 min to read


Fiat SpA may sell as much as $1.04 billion in shares to reduce debt and gain local investors after the carmaker formed from merging with Chrysler Group LLC lists stock in the U.S., according to Bloomberg News calculations, reported The Detroit News.


The company may have as many as 104.2 million shares available for sale when the newly created Fiat Chrysler Automobiles NV starts New York Stock Exchange trading later this year, based on cash-exit rights investors have exercised and earlier plans to dispose of treasury stock. At the current share price, that would be valued at 801 million euros ($1.04 billion).

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Chief Executive Officer Sergio Marchionne is combining Turin, Italy-based Fiat with its U.S. division to establish a manufacturer with the scale to compete with auto-industry leaders such as General Motors Co., Volkswagen AG and Toyota Motor Corp. Marchionne told Bloomberg News on Aug. 30 that stock submitted by shareholders who don’t want to be part of the merged company will probably be sold following the shift to U.S. trading “to create liquidity.”


Investors withdrawing from Fiat prior to the merger submitted 60 million shares, valued at about 463.6 million euros at the exit price of 7.727 euros a share, the company said today.


The stock will be offered to other Fiat shareholders at that price for about a month starting tomorrow, after which the carmaker will buy any shares that are unsold. Investors owning Fiat stock as of Sept. 9 will be eligible to buy one exit-program share for every 19.35 already held, Fiat said in a separate statement.


The buyout value was 7.3 percent less than the 500 million euros that Fiat had budgeted. Fiat’s stock reached a low for this year in early August amid investor concern that the cap would be exceeded, delaying the transaction.


Marchionne said in June that Fiat also plans to sell the stock it holds in treasury. That amounts to a little less than 44.2 million shares, or 3.5 percent of the total.

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Fiat rose 1.4 percent to 7.69 euros at the close Thursday in Milan, the highest price since July 25. The stock has gained 29 percent this year, valuing the carmaker at 9.6 billion euros. Fiat declined to comment on the potential stock-sale figure.


Shares in Fiat will be converted on a one-to-one basis to Fiat Chrysler stock when the listing shifts to New York. Marchionne said last week that U.S. trading may begin as early as Oct. 13. Fiat Chrysler will set up its headquarters in London.


The merged company’s new board will meet in late October and evaluate its capital structure, including weighing whether to sell new shares.


Marchionne said last week that he “learned a lot” from the creation of CNH Industrial NV, the truck and tractor company that separated from Fiat in 2011 and moved its listing to New York last year.


“The problem with the U.S. market is that there is no liquidity in CNH, so we need to fix that” for Fiat Chrysler, he said.

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