Campari backed down on moving its offices to the Netherlands: here’s why

A few weeks ago Davide Campari Milano, which makes the famous Italian Campari and Aperol brands, asked its shareholders for permission to move its registered office from Italy to the Netherlands.

But suddenly at the end of last week it did an about-turn and said it was likely to stay put. Why?

Simply a power grab by the controlling Garavoglia family was about to rebound very expensively.

The Netherlands has some of the most impenetrable and restrictive company laws in Europe. That’s why global giants such as Unilever and Shell are domiciled there to protect them from potential takeovers, which are virtually impossible unless the target company agrees.

By moving the company formally to the Netherlands, the Garavoglias were going to give themselves super-voting rights at a price to other shareholders below the prevailing €9.

So not only would the controlling family entrench their grip on the company but they would do so at virtually no cost.

Enter the coronavirus pandemic and Campari’s share price headed rapidly south to €6.35 at the close on Friday, significantly above the €8.376 other shareholders can demand to fall in with the Garavoglia’s plans.

So now the board (aka the Garavoglia family) have said the company will stay registered in Milan if they are asked to buy back more than three million shares worth about €25m in total.

At a 20% premium to the market price other shareholders would be well advised to pocket the money and run…if they can.
Observers expect the company to remain domiciled in Italy.