Bafin Approves Schaeffler’s Bid for Continental

The German federal financial supervisory authority (BaFin) has given the go-ahead for Schaeffler Group’s 70.12 euro per share cash bid to take over Continental AG. According to an official statement on the subject, the acceptance period for the offer begins today and ends at midnight on 27 August 2008.

Dr Juergen Geissinger, Schaeffler Group president and CEO, made it clear that Schaeffler wants to wrap up proceedings as soon as possible, pointing to recent comments made by vehicle manufacturers including Volkswagen, GM and Porsche: “Public statements of customers of both companies from the automotive industry show that they view a possible alliance between Schaeffler and Continental as positive…We remain determined to come to a rapid agreement with Continental AG’s management that is in the interests of all parties involved. Regardless of the previous rejection of our offer, we can see a great opportunity for this, because we remain prepared to continue Continental AG’s existing strategy, which we explicitly support, together with the management.”

Responding to earlier comments from Continental’s management that a price at this level undervalues the tyre and automotive supplier, Schaeffler’s statement explained: “The price offered corresponds to the weighted average price of the Continental share in Xetra and floor trading during the last three months before announcement of the takeover offer on July 15, 2008 and is thus considered an appropriate compensation…The price offered includes a premium of 16.16 euros, equalling 29.95 per cent, on the Xetra closing price in stock trading on 11 July 2008, the last trading day before a possible offer of the Schaeffler Group was first reported in the media.”

The Schaeffler Group reiterated its plans to acquire a stockholding of “more than 30 per cent in Continental AG.” According to Schaeffler, this strategic shareholding is necessary to enable the implementation of the Group’s objectives and to safeguard the long-term investment in the company. A purely financial investment does not…meet the objectives of the Schaeffler Group,” the company explained. This means Schaeffler will not break up Continental AG or sell off the tyre business, the statement added.