Release time : 2015-06-12 11:41:16
If you believed every newspaper and expert opinion on Schaeffler???s bid for Continental in particular ??Auto Magazines??? and friends at Porsche, the takeover is a completed deal - then stop, think again & maybe you???ll reconsider.
Apart from Maria Schaeffler having little remaining cash reserves with deep pockets relying on its creditors & banks to prop the Continental offer, there are 3 questionable issues for Continental shareholders to have a drink over.
Schaeffler is not renowned for automotive Taper Roller Bearings particularly front & rear wheels.
Continental???s insignia product for OEM or Replacement aftermarket is primarily Tyres, making way for conflicting interests or at the expense of a taper roller expert with the likes of TIMKEN, the Japanese or dare mention Chinese.
If Schaeffler???s idea in obtaining Continental shares to bolster tapers then with current competition & global auto downturn, what assistance can Schaeffler give to Continental? Its ??think again???
Debt Ratio & Exposure
If Schaeffler???s bid for Continental is successful, the combine service debt will be 31 Billion Euros or over US$50 Billion most people cannot write this amount.
Any top financial guru or consultancy corporation will advise to re-advise this exposure and highly doubtful they would approve. For Schaeffler to use the ??Porsche??? model for the takeover of Volkswagen is a different criterion, Schaeffler doesn???t make Cars or Tyres.
Banks are misled if receiving 4% is an acceptable income for shuffling their numbers, or are there other reasons to the layman or existing shareholder not fully transparent? Its ??think again???
Plunge at your Peril
It now appears Schaeffler has no grand takeover plan in its approach to Continental.
From day one we were told of a ??hostile??? takeover, why?
Not only does this look sloppy, but the use of the word ??professional??? escapes..
What was the problem of corporate discussions between these two over a few months, finding out each other differences, pros & cons, and if all else fails then declare ??war???. It takes time especially for such a big event for shareholders to reasonably comprehend.
Understandable, Continental has put up the shutters and will no doubt raise many critical constructive issues as to why shareholders should ignore Schaeffler???s stance. And each day is costing mega millions for the money already committed.
Its ??think again??? for Maria to reconsider.