Continental's management united against bid
FRANKFURT (Reuters) - Top management at German car parts supplier Continental AG (CONG.DE) is united against an unsolicited bid by rival Schaeffler group ahead of a critical supervisory board meeting on Wednesday, a senior executive said.
"We stand together as management on this," Karl-Thomas Neumann told Reuters on Monday, dismissing as "nonsense" a newspaper report that he was poised to replace Chief Executive Manfred Wennemer should the board fail to agree on the offer.
The Continental CEO has accused Schaeffler of a stealth takeover intended to rob shareholders of an appropriate premium because the family-owned bearings maker secured claims on a 36 percent stakeholding that used cash-settled derivatives spread out among a host of banks to avoid disclosure requirements.
Neumann's comments preceded news later on Monday that Schaeffler would minimally raise its offer to 70.12 euros per share to match that of the legal minimum in Germany for mandatory takeover bids triggered when a stakeholding crosses the 30 percent mark.
Shares in Continental edged 0.4 percent lower to 71.71 euros, above the required volume-weighted average price from the past three months of 70.12 euros for mandatory tender offers that Schaeffler is bidding.
The new bid values Continental's equity at roughly 11.3 billion euros. Previously Schaeffler was willing to give shareholders at least 69.37 euros in cash per share.
While it has said it does not need a majority stake, Schaeffler has repeatedly rejected an offer by Wennemer to support a 20 percent minority holding, preferring to hold at least 30 percent to achieve its strategic goals.
STAKE
Reuters reported last week that differences had emerged among board members over the deal, with Chairman Hubertus von Gruenberg casting doubt on hope the company could successfully defend itself against the bid.
Neumann, who formerly headed Volkswagen's (VOWG.DE) electronics strategy, took over responsibility for Continental's erstwhile Automotive Systems division in October 2004.
Following the reorganization of Continental resulting from its massive acquisition of the Siemens VDO automotive electronics business, 47-year-old Neumann heads both Conti's Chassis & Safety unit as well as its Powertrain division.
As such he has been viewed as a top candidate along with finance chief and tires boss Alan Hippe to become CEO when Wennemer's contract expires in September 2011.
Germany's Frankfurter Allgemeine Zeitung cited well-informed sources as saying Wennemer would be willing to step down as CEO on Wednesday to avoid a boardroom conflict, paving the way for Neumann to take his place.
A Continental spokesman denied the report.
"Normally we do not comment on groundless speculation, in particular when the goal is to sow discord and drive a wedge between management," he explained. Continued...
