Fiat CEO blames 'overreaction' for selloff threatening merger
MILAN/DETROIT Aug 6 (Reuters) - Fiat Chrysler chief Sergio Marchionne on Wednesday blamed overblown press reports and a "lack of understanding" of the merger with Chrysler for a share sell-off that threatens to prevent the tie-up's completion.
Marchionne was speaking after Fiat shares fell as much as 8.5 percent to their lowest level this year, extending losses from the previous session, with traders citing worries over the merger operation going through.
The sell-off increases the probability that shareholders who did not back the merger will exercise their rights to sell the shares back to Fiat, threatening to nullify the tie-up plan if a 500 million euro ($668 million) payout threshold is breached.
"The press has overplayed the withdrawal rights scenario," Marchionne told analysts during a conference call on Chrysler earnings. "We are paying the price for an overreaction ... and a lack of understanding of what this means."
The number of shares affected by the exercise of exit rights will not be known until around Aug. 25, Marchionne added.
Under the terms of the deal, which reflect Italian stock market laws, investors can tender shares that were not voted in favour of the deal for an exit price set at 7.727 euros. Fiat shares were down 5.6 percent at 6.465 euros at 1629 GMT.
"I am absolutely unfazed by all of this," Marchionne said on Wednesday.
Should the merger plan fail as a result of the exit rights, he added, "we will wait until we have better conditions to get this done". (1 US dollar = 0.7480 euro) (Reporting by Agnieszka Flak in Milan, Bernie Woodall and Ben Klayman in Detroit, editing by Louise Heavens)
© Thomson Reuters 2017 All rights reserved.