* Schaeffler terminates August 2008 investor agreement
* Agreement protected Continental, now seen as irrelevant
* Schaeffler debt at 10.3 bln eur after leveraged buyout
(Adds details, background)
FRANKFURT, May 13 Schaeffler has
terminated a 2008 investor agreement with Germany's Continental
AG, both companies said on Monday, potentially opening
the door to a break-up or full acquisition of the tyre maker.
The agreement, the climax of an extended hostile takeover
battle by the German ball-bearing firm, protected Continental
among others from a breakup, a de-listing or asset strip after
the departure of its then management.
Schaeffler, which currently owns 49.9 percent of
Continental, said that the bulk of the agreement had ceased to
be practically relevant in August 2012.
Both companies said that little would change concerning
their loose alliance.
"We consider our investment in Continental a long-term
strategic investment aimed at sustainably increasing the value
of Continental AG," Schaeffler owners Maria-Elisabeth Schaeffler
and Georg F.W. Schaeffler said in the statement.
Operating unit Schaeffler AG and its holding parent
Schaeffler Verwaltungs GmbH shoulder a combined 10.3 billion
euros in overall debt from the deal despite having reduced their
stake from around a level of around 90 percent immediately after
Continental Chief Executive Elmar Degenhart, who was
installed by the Schaefflers as CEO of the tyre and brakes
manufacturer in 2009, called the move "understandable".
"We are confident that the two companies will continue their
very good and goal-oriented cooperation on into the future,"
(Reporting by Christiaan Hetzner; editing by Patrick Graham)