Fiat Won’t Alter Cap on Stock Payouts for Chrysler Merger

Fiat SpA says it won't raise its €500 million limit on spending to buy back stock from shareholders who object to the company's merger with Chrysler Group LLC.

The declaration rejects a report by Italy's La Repubblica, which claims Fiat is ready to waive the cap if necessary to enable the merger to go forward.

Earlier this month Fiat shareholders approved by an 85% margin a proposal to combine the two companies to form Netherlands-based Fiat Chrysler Automobiles NV. The plan will pay shareholders who don't want to convert their holdings to shares in FCA an exit price of €7.73 per share.

If the cost of doing so exceeds €500 million, Fiat says it will simply abandon the current proposal and offer a new one. Analysts assume the revised plan will set a lower cash exit price, thus enabling Fiat to pay off dissenting investors without exceeding the original budget.