Schaeffler Group’s opportunistic takeover offer not acceptable to Continental
Continental Executive Board rejected a takeover offer for the company from Schaeffler Group, terming it as highly opportunistic and nowhere near to Continental’s true value. The Schaeffler Group had offered €69.37 per share in cash.
According to Continental, the offer is devoid of trust and strategic rationale. Schaeffler Group is taking advantage of current equity market to take control of a strong technology company so as to deny an appropriate premium to the Continental’s shareholders. An analysis reveals that Schaeffler Group has acquired 36 per cent of Continental’s outstanding capital unlawfully, in collaboration with banks, so as to gain a qualified majority at the shareholders’ meeting.
In the backdrop of recent talks, Schaeffler Group’s public statements that it is interested only in achieving minority position and does not intend to alter Continental’s sound structure, were seriously doubted by the Continental Board.
Continental welcomed Schaeffler Group as a long term investor and expressed readiness to support investment of 20 percent, but could not accept its insisting on 30 per cent stake. The strategic collaboration would benefit Schaeffler Group more than Continental AS Continental already possesses strong potential even without collaboration.
Continental is one among the top automotive suppliers in the world with annual sales target of €26.4 billion in 2008. It employs a staff of 150,000 at 200 of its locations in 36 countries.
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