Fiat Shares Plunge Over Chrysler Merger Worries
MILAN (AP) -- Fiat shares have been suspended temporarily after an excessive drop due to investor concerns that a planned merger with Chrysler may be blocked.
Fiat shares slid 7 percent to 6.34 euros ($8.47) in Milan trading Wednesday.
Shareholders voted last Friday to approve a merger with Chrysler, which will move the new company's center of gravity abroad with a U.S. listing, U.K. tax home and Dutch legal headquarters.
One important hurdle remains. Italian law gives dissenting shareholders the right to cash out.
The market drop reflects concerns that the payout, which has been set at 7.727 euros a share to reflect Fiat's recent average share price, will exceed Fiat's 500 million-euro cap. If it does, it would derail the merger at least temporarily.
The cash-out period ends in 14 days.