RE: Dreaming of a new spider

["Brian Shorey" <bshorey@domain.elided>]

> > George, you're posting some incorrect info to the Digest there.
> >
> > - GM has NO option to purchase Fiat Auto (by the way, Fiat SpA is
the
> >   group, Fiat Auto is a division).
> 
> Technically, you're right. Its not an option, its a 'put' agreement 
> between Fiat and GM
> 
> 
> > - Fiat SpA has a "put" option to force GM to buy Fiat Auto (at a
fair market
> >   value) from 2004-2009.  This was an escape clause in the contract
when
> >   Fiat and GM swapped equity and is a quite common insert in order
to
> >   protect the shareholder, blah blah blah...
> 
> But since GM is under no obligation whatsoever to purchase the rest of

> the ailing company, In simple terms, the purchase is 'optional.'
<snip>

I think the main point of interest here is that GM doesn't hold the
option, Fiat does.  GM doesn't have the option to purchase any more of
Fiat (unless Fiat agrees), but Fiat does have the option to force GM to
purchase them.

Which makes the whole Ferrari thing a moot point.  It doesn't matter
what GM may or may not want to do with regards to Ferrari, Fiat can
force GM to purchase without putting Ferrari on the table.  Given that,
Fiat would be stupid to give up Ferrari and Maserati.

bs
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