Continental plots defense to $18 bln bid
HANOVER, Germany (Reuters) - Continental AG Chief Executive Manfred Wennemer was plotting his defense on Thursday against an unwanted $18 billion bid from Schaeffler even as divisions began to emerge with his own chairman about the offer.
On Tuesday, ball-bearing maker Schaeffler announced a cash bid worth at least 69.37 euros per share -- below Continental's
stock price of about 72 euros.
But Schaeffler's advances have stirred resentment at the headquarters in Hanover of the tires-to-brakes group. On Wednesday, Wennemer slammed the offer as too low and warned that the predator could ultimately dismantle Continental.
It was unclear, however, whether Wennemer had the support of his chairman Hubertus von Gruenberg after a company source told Reuters that von Gruenberg said internally he saw little hope for a defense. Continental declined to comment.
The takeover would be the biggest so far this year in Europe and would put the combined group head-to-head with Robert Bosch
for the position of second-biggest global car-parts supplier -- behind Japan's Denso.
Wennemer has also turned to Germany's stock-market watchdog to intervene after Schaeffler won control of more than a third of its shares through options organized for it discreetly by banks. Bafin said on Thursday it would investigate.
Schaeffler, owned by German billionaire Maria-Elisabeth Schaeffler, hit back at Wennemer's attack, labeling his tone "incomprehensible".
The case has meanwhile roiled politicians angry about Schaeffler's tactics.
Finance experts from Germany's ruling coalition of conservatives and centre left social democrats (SPD) promised to close legal loopholes that may have allowed Schaeffler to build up such a stake covertly.
SPD finance policy spokeswoman Nina Hauer said she was "appalled" by Schaeffler's tactics. "If it's possible to get around the (share stake) reporting threshold using such tricks we must take urgent steps to change the situation."
OBSTACLE COURSE
Continental's Wennemer could erect other hurdles, such as pushing through a capital raising or finding a friendly white knight bidder. Analysts, however, see few companies that might make such a bid.
Italian tire maker Pirelli said it had no interest in either Continental or its tires business, which might be sold in any break-up. Continued...
