Family-owned Schaeffler Group opens offer for Continental shares
The family-owned German firm Schaeffler officially launched on Wednesday its offer for shares in the auto-parts group Continental, which has already rejected the bid.
By Agencies |
FRANKFURT: The family-owned German firm Schaeffler officially launched on Wednesday its offer for shares in the auto-parts group Continental, which has already rejected the bid.
Germany's stock market authority BaFin approved Schaeffler's cash offer of 70.12 euros (109.28 dollars) per share, which corresponds to the average price over the past three months, a statement said.
The figure was "a fair price that is attractive for the shareholders of Continental," the statement quoted Schaeffler chief executive Juergen Geissinger as saying.
Schaeffler "is aiming for a rapid agreement in the interest of all parties involved," he added. The offer will remain valid until August 27 at midnight, Schaeffler said. Continental shares were 0.32 percent lower at 72.00 euros in midday trading, while Frankfurt's Dax index of leading shares was 0.54 percent higher overall.
Their value has fallen by almost half in the past year as Continental struggled with heavy debt taken on to buy the auto parts company VDO, rising costs for raw materials and a slump in the auto sector. A Continental spokeswoman told AFP: "We are aware of the offer. It did not surprise us. We will take a position on the offer within the legal timeframe" of around 10 days.
On July 23, a Continental statement said that members of both the board of directors and the supervisory board "reject the offer in its current form." The decision had come after "intensive discussions" during which Continental had offered to accept Schaeffler taking a stake of around 20 percent.
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Schaeffler, a specialist in precision roller bearings and other parts for the auto and aerospace industries, has quietly gained access to around 36 percent of Continental's equity while avoiding having to declare its intentions to BaFin, the German stock market watchdog. Schaeffler has insisted it does not seek a majority stake, and its statement said the group "is seeking to acquire a strategic shareholding of more than 30 percent in Continental." The family-owned company, which is much smaller than Continental, posted 2007 sales of 8.9 billion euros.
Continental, the world's fifth-biggest auto parts company excluding tyres, is aiming for sales of 26.4 billion euros this year. Schaeffler's strategy mirrors that of Porsche, the luxury sports car maker which has gradually built its stake in Volkswagen, the biggest European car maker to more than 30 percent.
Porsche has said however that it intends to own more than 50 percent of the shares in VW at some point in the future. Schaeffler's statement said that "regardless of the previous rejection of our offer, we can see a great opportunity for this, because we remain prepared to continue Continental's existing strategy, which we explicitly support, together with the management."
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Unions that represent Continental workers and company managers fear Schaeffler would break up Continental and sell its tyre division to help pay for a takeover. Download
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