Ferrari negotiated with Italy terms of enhanced voting rights scheme, sources say

By Giuseppe Fonte and Giulio Piovaccari

ROME/MILAN (Reuters) – Ferrari held talks with the Italian government to amend measures in Rome’s capital markets bill that would help the luxury sports carmaker bring its registered office back to Italy from the Netherlands, two sources told Reuters on Friday.

To be approved by parliament in February, the legislation allows listed companies to issue shares that boost the influence of longstanding investors.

The sources, who are familiar with the matter but asked not to be named, said Ferrari pushed for a special regime allowing its top shareholder, the Agnelli family holding Exor, to retain enhanced voting rights it has under Dutch law, should the automaker relocate its headquarters to Italy.

Ferrari declined to comment.

One of the most famous Italian brands, Ferrari moved its registered office to the Netherlands in 2015, before the carmaker was spun-off from former parent Fiat Chrysler and separately listed at the beginning of 2016.

It has always kept its fiscal base in Italy, with Milan as its main stock market.

Ferrari is just one of several large Italian groups that have established in the Netherlands over years to enjoy the benefits of the country’s favourable loyalty share legislation, which help leading shareholders keep a tight grip on companies.

They include Exor itself, the Berlusconi family’s Mediaset and Campari, while brake maker Brembo is scheduled to complete the process in April.

Announcing the bill last year, Italy’s Treasury proposed that voting rights enhancements would only apply to companies planning an initial public offering, as it aimed to encourage business owners to go public without worrying about losing companies’ control.

Yet the cabinet office and the ruling parties opted for a more aggressive approach, extending to companies already listed the possibility of issuing shares with up to 10-times voting rights through the so-called “loyalty-share scheme”.

Under Italy’s current regulation on loyalty shares, investors holding their shares for at least 24 months are entitled to double voting rights. As part of the new bill, voting rights can further increase up to 10 per share, after a series of 12-month intervals following the first 24-month period.

The proposed legislation also makes it possible for investors to include the time they have been holding shares while the company was legally headquartered abroad to the calculation of the overall period necessary to access enhanced voting rights in Italy.

Such provision would allow shareholders in Ferrari and other companies to immediately rely on enhanced voting rights, should they decide to relocate their businesses to Italy.

Exor has a 24.4% stake in Ferrari, with over 36% of voting rights in the company.

(Reporting by Giuseppe Fonte in Rome, Giulio Piovaccari in Milan, additional reporting by Alvise Armellini; Editing by Emelia Sithole-Matarise)