Continental Board ‘Split’ on Takeover

The Schaeffler Group’s 11.2 billion euro bid for Continental AG has led to significant unrest amongst board members. According to various news sources, a rift has developed between chairman Hubertus von Grünberg and other executives. Frankfurter Allgemeine Zeitung went as far as saying that CEO Manfred Wennemer would be willing to step down in order for management board member Dr Karl-Thomas Neumann to take his place. Continental’s press department denied that this was the case.

The dissension appears to centre on Hubertus von Grünberg’s criticism of senior executives’ confrontational way of refusing Schaeffler’s offer. According to the Finanacial Times, his argument is that Schaeffler has pretty much succeeded in its bid by getting control of 36 per cent of Conti shares and that too much of a struggle could result in the break up of the company.

However there are also those that question von Grünberg assertions too due to the fact that he has worked as an adviser to Schaeffler and previous Conti takeover suitor GCG. He ceased working for GCG when they announced they would bid. He resigned from Schaeffler’s advisory board 10 years ago. von Grünberg’s only comment was to say the supervisory board is still working on what its opinion of the offer is.

Hubertus von Grünberg has suggested that struggling with the Schaeffler bid could result in Continental’s strong management team fighting themselves out of a job. This is exactly what happened when Schaeffler bought FAG in an earlier hostile takeover.

Groundless speculation

A Continental spokesman denied reports Karl-Thomas Neumann was stepping up to replace Manfred Wennemer: “Normally we do not comment on groundless speculation, in particular when the goal is to sow discord and drive a wedge between management,” he commented.

According to FT, Manfred Wennemer is preparing “an aggressive defence plan” to present to Conti’s supervisory board meet on 23 July.