* Loyalty scheme to reward long-term investors
* Set to benefit Exor, Peugeot family, France, Dongfeng
* Move could strengthen defences against hostile takeover
(Adds details, context)
MILAN/LONDON, Nov 20 (Reuters) - Top shareholders in merging
carmakers Fiat Chrysler (FCA) and Peugeot maker PSA have moved
to tighten their grip on the combined business and head off any
potential hostile bidders.
A prospectus for the deal, which will create the world's
fourth-biggest automaker, showed on Friday there would be a
loyalty scheme for long-term shareholders in the business, which
will be called Stellantis.
Investors that hold Stellantis stock uninterrupted for at
least three years could be given extra voting shares.
That could give extra clout to Exor, the holding
company of Italy's Agnelli family and FCA's
controlling shareholder, and to top PSA investors -
the Peugeot family, French government and China's Dongfeng.
After the merger, Exor would become Stellantis's largest
single shareholder with a 14.4% stake. The Peugeot family would
follow with a 7.2% stake, while the French state and Dongfeng
would hold 6.2% and 5.6% respectively.
Under the loyalty scheme, the combined voting rights of
these top investors in Stellantis could top 50% after the three
year period, according to Reuters calculations.
That could make it harder for other investors to push
through management changes and make takeover attempts
potentially more difficult.
No single shareholder will be allowed to hold more than 30%
of voting rights based on the loyalty scheme, according to the
Tax consequences of the scheme were uncertain, the
Stellantis will have a Dutch-domiciled parent company and
its shares will be listed in Paris, Milan and New York.
Loyalty schemes are common for companies in the Netherlands
and have already been used by Exor, including in the spin-off of
Ferrari, boosting Exor's grip on the sports car maker.
PSA CEO Carlos Tavares will run Stellantis and will receive
a 1.7 million euro ($2 million) bonus on completion of the
merger, the prospectus said.
FCA CEO Mike Manley will receive "a recognition award with a
value equivalent to approximately five times his annual base
salary" and a cash retention after the merger if certain
conditions are met.
The prospectus said each company could terminate the tie-up
if it is not completed by June 30, 2021 due to a failure to
obtain the necessary regulatory approvals
PSA and FCA have filed the merger plan with antitrust
authorities in 21 countries and the European Union. To date,
they have obtained approval from 15 countries and a preliminary
okay from Brazil, which becomes final next week.
The EU is also expected to authorise the merger, sources
Shareholders of the two groups will meet on Jan. 4 to
approve their merger, which is expected to be finalised by the
first quarter of next year.
($1 = 0.8432 euros)
(Additional reporting Gilles Guillaume in Paris; editing by
Mark Potter and Jason Neely)