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By Bloomberg

Almost 70 years after Enzo Ferrari rolled out his first sports car, Ferrari is set to again be family controlled after Fiat Chrysler Automobiles NV spins off the company this year.

While public shareholders will own a majority of the shares, John Elkann and other descendants of Fiat founder Giovanni Agnelli, together with the son of Ferrari’s founder, probably will control 51 percent of the votes at an independent Ferrari, according to calculations by Bloomberg News.

That’s because the company is likely to follow Fiat Chrysler’s lead and set up a so-called loyalty share plan, which would give the family extra votes if it agrees to hold the stock for a set amount of time. Ferrari will be one of the only independent ultra-luxury carmakers, and the shareholder setup will allow the Agnellis to fend off potential bidders.

“With a loyalty plan, the Agnellis want to make sure Ferrari can’t become a takeover target,” said Giuseppe Berta, a Fiat expert at Bocconi University.

Marchionne said in a Feb. 10 interview that Maranello, Italy-based Ferrari may adopt a loyalty voting plan. Fiat Chrysler, which owns 90 percent of Ferrari, plans an initial public offering for 10 percent of the unit by the third quarter, with the remaining stake to be distributed to Fiat Chrysler shareholders by year’s end. Piero Ferrari owns the rest of the company and plans to keep his holding after the separation from Fiat.

Long-Term Thinking

Under a loyalty plan, Exor SpA, the Agnelli family’s holding company, could end up with 36 percent of the votes and Piero Ferrari could get 15 percent if no other shareholders participate. A spokesman for Exor declined to comment on the calculation.

Advocates of loyalty share-voting plans say the arrangements encourage long-term corporate thinking. Some investors and academics decry them as a way for family owners to retain control long after giving up majority ownership.

“The loyalty scheme clearly helps controlling shareholders to tighten their grip drastically, cutting the chance of a change of control and reducing the powers of minority investors,” said Carlo Scarpa, a professor of industrial economy at the University of Brescia.

While loyalty-voting plans have been legal in Italy since last year, Ferrari may follow the same path as Fiat Chrysler and move its legal base to the Netherlands. The law there also allows the plans, and Marchionne said the country is more conducive to preparing companies for a listing in the U.S.

Investor Opposition

Institutional investors made clear last month that they’re opposed to multiple voting rights. Scarpa was among a group of academics and money managers who wrote to Italian Prime Minister Matteo Renzi to object to a parliamentary proposal that would have extended a temporary rule allowing companies to introduce such plans with a simple majority vote.

The Ferrari and Agnelli families have a long history together. Enzo Ferrari, who died in 1988, began his career in auto racing, and began making cars for use on roads in 1947. Fiat bought 50 percent of Ferrari in 1969 and increased the stake over the years to the current 90 percent. Ferrari will present its 488 GTB turbo at the Geneva International Auto Show tomorrow.

Elkann, the Agnelli heir who runs the family business, is chief executive officer of the Exor holding company and Fiat Chrysler’s chairman. He may want to expand Ferrari into a luxury-goods brand outside of the car industry, said Berta, the Bocconi University professor.

‘Speculative Appeal’

While institutional investors object to multiple voting rights, in practice such a plan probably won’t hurt demand for Ferrari shares in the IPO. Marchionne, for one, joked Feb. 10 that banks will be able to sell the shares in the time it takes him to eat a bagel in the morning.

Money managers also are accustomed to such a setup, which is used by Fiat Chrysler and CNH Industrial NV, the heavy- vehicle maker that was spun out of Fiat.

“While a loyalty voting plan would reduce the speculative appeal of Ferrari, since only friendly combinations become possible, that governance system isn’t seen as a real issue by investors,” said Massimo Vecchio, an analyst at Mediobanca in Milan who estimates Fiat Chrysler may get about 800 million euros from selling the 10 percent stake in Ferrari.