Continental rejects Schaeffler offer again

FRANKFURT: German auto parts maker Continental AG on Wednesday again declined a bid by rival Schaeffler KG to take over the company, but opened the door to more talks with the suitor soon.

Hannover-based Continental said in a statement the offer price of euro70.12 (US$104.48) per share in cash remained ``inadequate from a financial point of view.''

With about 161 million Continental shares outstanding, privately held Schaeffler's offer is worth approximately euro11.3 billion (US$17 billion).

``The bidder's offer is equivalent only to the legally required minimum price and in the opinion of the supervisory board and executive board, does not reflect the long-term value potential of the company,'' Continental said after a meeting of the supervisory board, the German equivalent to a U.S. board of directors. ``The economic advantages presented by a merger with the Schaeffler Group are limited.''

Despite that issue, Continental did say that there was a ``potential to leverage synergies primarily in the production of transmissions and, in the future, in the field of hybrid technology.''

The board did agree to continue talks with Schaeffler ``in the short term'' with an eye toward reaching an amenable solution.

If a takeover effort is successful, it would make Schaeffler the world's biggest auto component maker, putting it ahead of competitors like Robert Bosch GmbH.

Continental makes products including tires, brakes and interiors for cars and trucks.

Schaeffler makes ball bearings for the industrial, aviation, aerospace and the automotive sectors as well as components for engines, transmissions and drive trains.

Shares of Continental were up nearly 3 percent at euro73.58 (US$110) in Frankfurt afternoon trading.