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Concerns about EXOR’s minority shareholders

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7 October 2016 – On 3 September 2016 EXOR S.p.A.’s shareholders approved the company’s cross border merger into EXOR N.V. and the simultaneous change of the company’s articles of incorporation, significantly affecting the rights of its shareholders. European Investors, together with its Dutch member VEB, investigates whether EXOR’s intended course of action is justified according to Dutch law.

EXOR is an Italian, globally active investment company, originally functioning as part of the Agnelli family’s holding structure for its investments in the automotive companies CNH Industrial (27%), FCA N.V. (29%) and Ferrari N.V. (23%), media company The Economist Group Ltd. (43%), reinsurance company PartnerRe Ltd., soccer club Juventus S.p.A. (64%), oilfield service provider Welltec A/S (14%) and bank Banca Leonardo S.p.A. (17%).

On 4 October 2016 VEB and the European Investors’ Association put several questions to EXOR.

The first issue addressed in the letter concerns the introduction of loyalty shares. This is presented by EXOR as a reward for loyal shareholders’ long term-investments and an incentive for keeping the shareholder base stable. Upon the fifth and tenth anniversary of a shareholder’s registered shareholding loyalty voting shares are awarded to the eligible shareholders. In the medium to long term, this may also contribute to an increasing difference between shareholder’s actual investments and their voting rights, increasingly eroding the ‘one share-one vote’ principle. That would be contrary to the interests of a growing part of the company’s shareholders.

The second issue raised in the letter concerns the access of shareholders to the enterprise chamber of the Amsterdam court of appeal (ondernemingskamer). It appears that when drafting the articles of incorporation, certain choices have been made that may effectively hinder shareholders’ action.

Given the popularity of the EXOR share amongst Italian retail shareholders, VEB and European Investors are concerned about the actual access by these shareholders to future general meetings of shareholders. The last question addresses this issue. Hopefully, EXOR will take measures aimed at enabling Italian shareholders to participate actively in general meetings without being barred from attending by geographic distance.

For more information: niels.lemmers@europeaninvestors.eu / qbongaerts@veb.net

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