Why Exor with Psa and Stellantis scraps Fiat. Bragantini’s analysis of Feltri’s Domani
What does Exor really have in mind for FCA with Stellantis? Here is the analysis of the economist Bragantini published in the newspaper Domani directed by Stefano Feltri
“Since yesterday, Fiat Chrysler Automobiles (FCA) and Peugeot are no longer independent, but part of a single company: Stellantis. After just over 120 years, the Fiat story ends ”.
So writes today the economist Salvatore Bragantini in the newspaper Domani directed by Stefano Feltri.
Exor is the first shareholder, but the prospectus for admission to the market of Stellantis, having to specify who bought who, specifies: "FCA and PSA's management determined that PSA is the acquirer for accounting purposes and as such, the merger is accounted for as a reverse acquisition ".
In short, adds Bragantini (formerly a columnist for Sole 24 Ore , Corriere della Sera and Repubblica ), "Exor sold Fca to Peugeot, becoming an important shareholder of this, which is also evident in the distribution of the number of seats (six out of eleven to the French ) and of the power in the Stellantis Board of Directors, which will be led by the big boss of Peugeot, Carlos Tavares ”, wrote the economist and professor at the University of Milan on Domani .
“For Exor – according to Bragantini – Ferrari is worth, and counts, much more than FCA. If the first is the crown jewel, the second is an asset available at any time in the face of future developments, perhaps concerning the elimination of excess production capacities; in clear, the closure of industrial plants made superfluous by the merger ".
In the meantime, purchases continue today on FCA in Piazza Affari in the aftermath of the green light of the shareholders' meeting to merge with Psa.
The shares of the Italian-American group rose by 1.3% to 15,074 euros, with a maximum of 15,092 euros, when the Ftse Mib is just above par (+ 0.08%).
Yesterday at the end, FCA recorded a progress of 1.5%, below the lows of the day, slowed by the general trend of the market. Peugeot is also making progress on the Paris Stock Exchange (+ 1.4%), after the shareholders of the transalpine group have also approved the operation that will lead to the birth of Stellantis, the fourth largest car manufacturer in the world by volume and third by turnover ( according to 2019 accounts).
The finalization of the merger is scheduled for next January 16th. The shareholders of FCA before that date will receive an extraordinary dividend of € 1.84 per share, for a total amount of € 2.9 billion. The distribution is subject to certain bureaucratic conditions which – according to the company – will be resolved by January 13th and thus the payment date can be communicated to the shareholders of the coupon.
As Fidentiis analysts recall, the shareholders of FCA and PSA could receive another 500 million euros in dividends (or one billion for the shareholders of Stellantis).
To this must be added the distribution of the shares of Faurecia still held by Psa (equal to 39.3% of the capital) and the 308 million euros obtained by the French group when on 29 October 2020 it sold over 9 million shares of the active subsidiary in components.
Finally, Stellantis shareholders should still receive value from the distribution of FCA's stake in Comau. It should also be remembered that yesterday, with the markets closed, the data on registrations for December and for the whole of 2020 in Italy were published.
START MAGAZINE INSIGHTS:
FCA-PSA merger: scenarios, risks and opportunities. Bertone speaks
It will be the French PSA to buy FCA (other than merger at par)
What will change with Stellantis in Turin, Melfi, Pomigliano and Sevel . Benaglia's intervention (Fim-Cisl)
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FOLLOWING BRIEF EXTRACTS FROM BRAGANTINI'S ANALYSIS ON TOMORROW DIRECTED BY STEFANO FELTRI ( here the full analysis in the newspaper Domani ):
Since yesterday, Fiat Chrysler Automobiles (FCA) and Peugeot are no longer independent, but part of a single company: Stellantis. After just over 120 years, the Fiat story ends.
THE GLOBAL GROUP, LITTLE ITALIAN
Gianni Agnelli wanted a global group, centered on the car, Italian of course, even if he was almost ashamed of Italy, like a poor relative that you cannot deny.
His designated heir John Elkann turned it into a cosmopolitan financial group, controlled by the Netherlands and paying taxes in London. Italy is no longer needed, without excluding, of course, the loans for 6.3 billion, guaranteed by the Italian Sace, against the domestic industrial vestiges of the group.
The strategy remains that of Marchionne; increase the weight of finance and reduce that of the car, which requires large capital to finance investments. The transition to electric exposes it to immense risks: due to the effects on the overall energy balance, still to be examined, due to technical problems in the engine, power distribution, brakes, recharging, etc.
Against this background, the prospects opened by the FCA-PSA merger must be seen, starting from a banal observation: 30 percent of Exor in FCA is worth, pre-merger, 11.4 billion dollars, while 30 percent of Ferrari is worth 5 billion. billions more.
Ferrari is not afraid of the electric threat, there will always be 10,000 rich people in the world willing to spend a small amount of money to buy a car, perhaps even an electric one, which should not be driven, but only shown; not really a car, but an investment, also because its performance cannot be used.
And the percentage in Ferrari remains unchanged, while Exor will have 14.4 percent of Stellantis; here the other main shareholders will be France with 6.2 per cent and the Peugeot family with 5.5 per cent.
WHO BUY WHO
Exor is the first shareholder, but the prospectus for admission to the market of Stellantis, having to specify who bought who, specifies: "Based on the assessment of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances, FCA and PSA's management determined that PSA is the acquirer for accounting purposes and as such, the merger is accounted for as a reverse acquisition ".
Clearly, Exor has sold Fca to Peugeot, becoming an important shareholder of this, which is also evident in the distribution of the number of seats (six out of eleven to the French) and of the power in the Board of Directors of Stellantis, which will be led by the great head of Peugeot. Carlos Tavares.
For Exor Ferrari it is worth, and counts, much more than FCA. If the first is the crown jewel, the second is an asset available at any time in the face of future developments, perhaps concerning the elimination of excess production capacities; in clear, the closure of industrial plants made superfluous by the merger.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-exor-con-psa-e-stellantis-rottama-la-fiat-lanalisi-di-bragantini-su-domani-di-feltri/ on Tue, 05 Jan 2021 11:09:44 +0000.