Not exactly victory

21 Aug 2008 By Edward Hadas

The German car parts maker has extracted just a 7% bump on a hardly generous initial offer. Schaeffler has accepted some conditions, but Conti s shareholders have little to be thankful for. Germany’s takeover law left them open to a squeeze.

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Context News

Schaeffler and Continental AG have signed a farreaching Investment Agreement. Schaeffler, a privately held German industrial conglomerate, will increase its offer for Continental shares by 7% to E75 per share. It will limit its position to 49.99% of the shares.

Schaeffler has also promised not to change the corporate structure, headquarters, business divisions or balance sheet structure. It will respect all rights of workers and support the ongoing strategy and business policies of Continental.

The shareholding limit lasts for four years. The overall Investment Agreement is openended, and cannot be terminated by either side before the spring of 2014. Gerhard Schröder, the former German prime minister, will serve as a guarantor of the interests of all stakeholders of Continental. If Schaeffler chooses to sell its shares, Schröder can choose a preferred bidder.

Manfred Wennemer, the Continental chief executive who strongly opposed the offer, will leave the company at the end of August.

Continental press release

Context News

Manfred Wennemer, the Continental chief executive who strongly opposed the offer, will leave the company at the end of August.

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