Schaeffler May Sell a Quarter of Conti

The German Schaeffler Group, which currently owns 90 per cent of Continental AG, may sell up to a quarter of the tyre and automotive supplier to investors in order to lift the financial burden of its so-called stealth takeover. Quoting unnamed bankers, Sueddeutsche Zeitung reported that the Schaeffler family is facing “increasing pressure from six banks” to change the terms of the company’s funding after Conti shares fell to less than 40 euros.

Meanwhile, Schaeffler Group sought to counteract reports that the company was planning to sell off its tyre and rubber products businesses by seeking European Union antitrust clearance for its takeover. The company hopes the move, made on 17 October, will reassure markets of its long-term plans for merging the businesses. According to Bloomberg reports, Schaeffler is in “constant contact” the regulator and expects approval within “the normal 25-day period.”

Since completing the offer on 16 September Schaeffler has been buying stock tendered in order to trim the cost of the deal. The tendered shares trade separately from the free-float shares and have been selling below the offer price. In total, Schaeffler has bought over 5 million tendered Continental shares since the offer ended.