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Fiat Chrysler returns Ferrari to family control

Italian carmaker Ferrari may return to family control during an initial public offering this year providing current owner Fiat introduces a “loyalty share” plan that will boost voting rights of established investors.
Press Association

Italian carmaker Ferrari may return to family control during an initial public offering this year if current owner Fiat introduces a “loyalty share” plan that will boost voting rights of established investors.

Loyalty shares have recently caused a divide between family businesses and institutional investors in Italy. Introduced by the Matteo Renzi-led government last year, they allow shareholders double voting rights if they hold stock longer than two years.

The government introduced the mechanism to encourage long-term shareholdings, but institutional investors, who traditionally prefer the “one share, one vote” mantra, have voiced their concerns about the scheme.

According to Bloomberg, Fiat Crysler’s non-family chief executive Sergio Marchionne said Ferrari might adopt a loyalty voting plan. It is likely that Fiat will list an independent Ferrari in the Netherlands where loyalty voting schemes are also legal.

Fiat already introduced such a scheme when it merged into Fiat Chrysler Automobiles last year, rewarding long-term investors, including controlling stakeholders Exor, the holding company of the Agnelli family.

If the programme goes ahead it will provide John Elkann, the fifth-generation chairman of Fiat, together with the son of Ferrari's founder, with 51% of the votes at an independent Ferrari.

Fiat plans to sell at least 10% of Ferrari in the IPO. The money raised will likely help fund a €48 billion ($60 billion) five-year investment plan.

Other Italian family businesses that have already employed loyalty shares include drinks brand Campari, audiology company Amplifon, and construction giant Astaldi.

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