Fiat Chrysler Says Terms of PSA Merger Unchanged After Dividend Cut News

By: Vivek Kumar.

Fiat Chrysler Automobiles, an Italian-American multinational corporation, said the terms of its alliance with Europe’s second-largest car manufacturer Peugeot SAhad not changed after Il Sole 24 Ore newspaper reported that it is considering ways to cut a planned 5.5 billion euro ($6.2 billion) of special dividend distribution to its shareholders.

Fiat Chrysler Automobiles confirmed that it would remain committed to the deal agreed with Peugeot SA in December last year. “The structure and terms of the merger are agreed and remain unchanged,” a spokesman for the Italian-American automaker told Reuters in an interview.

The world’s eighth-largest automaker has agreed to the conditions laid down for a state-backed 6.3 billion euro loan, including a promise not to relocate or cut jobs to weather the ongoing health crisis.

According to Reuters, Italian business newspaper Il Sole 24 Ore reported that Fiat Chrysler Automobiles could conserve cash by reducing the special dividend, possibly by handing shareholders assets as compensation.

Fiat Chrysler outlook and price target

Six analysts forecast the average price in 12 months at $9.94 with a high of $12.37 and a low of $6.75. The average price target represents a -0.10% decrease from the last price of $9.95, according to Tipranks.

From those six, three analysts rated ‘Buy’, two analysts rated ‘Hold’ and one rated ‘Sell’. HSBC raises target price to EUR 11.4 from EUR 11. Jefferies raises target price to EUR 9.50 from EUR 8.

Source: Yahoo Finance (2020)

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