Looking For Bearings?
All Types Of High Quality Bearings. Extensive Inventory, Fast Shipping.Find Exactly What You Want Today!
bearings
Bearing Manufacturer  Products  Bearing Types  Bearing News  

Continental Close to Clinching Deal With Schaeffler

By Bearing Manufacturer>Bearing News>Continental Close to Clinching Deal With Schaeffler
©2004-2012

Car parts maker Continental is set to drop opposition to hostile bidder Schaeffler and accept the ball bearings maker as its controlling shareholder in an agreement that could come early next week.

 

The two rivals have been locked in a tussle since Schaeffler last month launched an 11.3 billion euro ($16.9bn) hostile bid for the tyres-to-brakes firm, which is three times its size.

 

But yesterday, sources with knowledge of the matter confirmed that Schaeffler was poised to win over Continental by raising its takeover offer from the legal minimum of 70.12 euros to around 75 euros as well as granting other concessions.

 

"Continental is absolutely ready to sign a deal - it can all happen very quickly," said a source with knowledge of the matter.

 

Schaeffler has said it would not break up the world's fourth-largest supplier to the automotive industry, and would keep it listed on the market while supporting management's strategy - conditions that Continental has repeatedly said were necessary to gain its support.

 

It is also pushing hard for Schaeffler to agree to pick up a angular contact bearing tab in the hundreds of millions of euros for higher interest payments and lost tax benefits should it later gain a majority stake that triggers change of control clauses.

 

"Since Schaeffler doesn't want more than 50 per cent, it should not be a problem if Continental wants to insure against this contingency," the source said.

 

Schaeffler, whose Miniature Thrust Bearings can be found in everything from the London Eye ferris wheel to the US space shuttle, outmaneouvered Continental at the outset by secretly securing indirect access to a third of its stock that succeeded in scaring away any potential rivals for a white knight counterbid.

 

Lacking attractive alternatives and rendered largely defenseless, Continental's supervisory board on Wednesday pushed Continental chief executive Manfred Wennemer to reach an agreement acceptable to both sides before the Schaeffler tender offer expires on August 27.

 

"A deal could be announced by the start of next week,"another source familiar with the talks said.

 

Schaeffler has deliberately bid low to avoid winning a majority, which would force a costly refinancing of Continental's 11bn euro net debt pile.

 

Sweetening the offer price to a level that would likely value Continental's equity at around 12bn euros is meant as a goodwill gesture to Continental's management.

 

"The price will likely end heading towards a magnitude of 75 euros," a source with direct knowledge of the negotiations said.

 

Shares in Continental closed 1.1pc higher at 74.03 euros while the DJ Stoxx European automotive sector index firmed 0.8pc.


F T 
Latest Articles
Abec 5 Skateboard Bearings, Abec-5
Bearings Ceramic
Sealmaster bearing
Bower cylindrical bearing
Abec Bearing 608z, Skateboard Bearings
Small Bearing Suppliers
5/32 inner diameter = 0.156 inch
Small Parts And Bearings
Stainless Steel Skateboard Bearing,
Skateboard Bearing Spacer, Washer
Latest Topic
MR105zz Bearings
6804 2rs Bearings
K35X42X20 Needle Roller And Cage
696 Silicon Carbide Ceramic Hybrid
6916 2rs Bearings
PNA25/47 Aligning Needle Roller Bearings
R515zz
51124M Silicon Carbide Full Ceramic
694 2RS Bearings
601x Bearings
Category

Miniature Bearings
Deep Groove Ball Bearings
Flanged Ball Bearings
Miniature Thrust Bearings
Needle Roller Bearings
Stainless Steel Bearings
Ceramic Bearings
Skateboard Bearings
Dental Bearings
Custom Bearings


Latest Bearings


$index_product_mb$