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Analyst Recommendation Cut on Continental

As Merrill Lynch’s Michelin recommendation was upgraded to see in the new month, Continental’s was cut to “underperform” from “neutral”. The bank believes that Continental’s stock will see a fall to 60 euros in the coming weeks, after the expiration of Schaeffler’s offer to buy at 75 euros per share until reaching nearly half of the company’s total stock. Conti was down 0.1 per cent (5 cents) today at 74 euros in Frankfurt.

Merrill also links Conti’s predicted drop to Michelin’s rise, suggesting that investors who sell their shares in the German company could seek to invest in its rival in France.

1st September 2008/by Tyrepress Editors

Amtel-Vredestein EGM Approves Sibur Holdings Reverse Takeover

The planned reverse takeover transaction between Amtel-Vredestein and Sibur Holding, which would see the former company purchase all issued and outstanding shares Sibur Russian Tyres before the latter purchases the resultant enlarged company, has been approved during Amtel-Vredestein’s Extraordinary General Meeting of Shareholders.

Specifically, Amtel-Vredestein reports the following approved resolutions:

29th August 2008/by Tyrepress Editors

Conti: Statement Regarding Schaeffler Takeover

On August 26 Continental AG released the following statement:

On August 13, 2008, the Executive Board and Supervisory Board of Continental Aktiengesellschaft published their joint statement in accordance with Section 27 (1) sentence no 1 of the WpÜG (German Securities Acquisition and Takeover Act) regarding the voluntary public takeover offer of Schaeffler KG, Herzogenaurach, and amended the statement on August 20, 2008. On August 21, 2008, Continental entered into an investment agreement with Schaeffler KG, Mrs. Maria-Elisabeth Schaeffler and Mr. Georg F.W. Schaeffler. In this investment agreement, Schaeffler undertook, among other things, to limit its holding in Continental to a maximum of 49.99 per cent of the voting capital stock, unless the Executive Board of Continental agrees to a larger holding. Continental released the main content of the investment agreement in its ad-hoc announcement dated August 21, 2008.

27th August 2008/by Tyrepress Editors

Michelin Partners Chinese Gymnast in Shoe Deal

Playing a starring role at the Olympics opening ceremony meant a $30 million payout for former Chinese gymnast Li Ning. Investors reportedly snapped up shares in his Hong Kong-listed sportswear firm, Li Ning Co. Ltd., hoping that global recognition would follow the spectacle of the opening ceremony. However, tyre experts may be interested to learn taht Li-Ning Co. announced recently signed a tie up with Michelin to start technical cooperation to produce high-performance sports shoes.

18th August 2008/by Tyrepress Editors

Conti Schaeffler Deal Could be Concluded This Weekend

The month-long hostile takeover battle between Continental AG and Schaeffler Group could be over this weekend…or not. According to news reports, Conti and Schaeffler are negotiating a “friendly agreement.” Various sources are speculating that this means Jurgen Geissinger, Schaeffler’s chief executive, has tabled a new offer of 75 euros per share. However, both the Financial Times and Euroweek point out that it is not over till its over and if Continental shareholders refuse the offer Schaeffler will have to either convert all the swaps it holds in Conti into shares or terminate them all. 12 days of Schaeffler’s offer period remain.

15th August 2008/by Tyrepress Editors

Analysts “Still Cautious” on Cooper Shares

A financial analyst report on the fortunes of Cooper Tire suggests that investors will continue to be cautious with the American tyre manufacturer despite some positive signs.

The Deutsche Bank study states that Cooper’s “‘clean’ EPS loss, adjusted for a ‘normal’ 30 per cent tax rate, would have been ($0.26), compared with our ($0.23) estimate.” This figure is one that the Bank believes will deter investors for the time being, alongside “continued market share declines, high cash burn, lack of identifiable cost reductions, and warnings of further raw material increases.” On the other hand, the analysis states that the company’s plan “to raise prices by ‘up to 10 per cent’ in October” will mean that the share price will retain its strength.

6th August 2008/by Tyrepress Editors

Schaeffler Warns Continental Off Capital Raising Defence

Schaeffler Group has warned Continental not to employ a large capital increase as a way of warding off its 11.3 billion euro unsolicited takeover bid. Schaeffler’s move meant dropping a condition that would end the bid if Continental prepared to raise its share capital during the offer period, which is due to end on 27 August. “Schaeffler group thus counters market speculation that its offer to Continental shareholders could be prevented by such…measures,” an official statement explained.

6th August 2008/by Tyrepress Editors

Cooper Unloads its Kumho Share

Cooper Tire & Rubber Co. says it has completely liquidated its holdings in Kumho Tire. The purchaser, Cayman Islands based company Beacon, is said to have purchased the 10.71 per cent share in the South Korean tyremaker for 108.7 billion won (£54.6 million).

Kumho said in a filing to the Korea Exchange that Beacon had purchased the 7.5 million shares, each valued at 14,501 won, held by Cooper Tire & Rubber. In addition to the 108.7 billion won, Cooper will receive interest backdated to May 31.

6th August 2008/by Tyrepress Editors

Continental Bolsters Defences with Citigroup, HSBC

Continental AG has reportedly bolstered its defensive options against a hostile bid from Schaeffler Group with the appointment of Citigroup and HSBC to its defence teams. Quoting sources familiar with the matter, Reuters reported that the move will add two banks with the ability to lend cash from their balance sheets to Goldman Sachs, known for its defensive advisory work. The same source said defensive measure may include “a possible capital increase or striking a deal with a white knight.”

4th August 2008/by Tyrepress Editors

Professor: Schaeffler’s Creeping Takeover Illegal

Prof. Mathias Habersack, of Eberhard Karls University in Tuebingen, Germany, has spoke out against the way in which Schaeffler Group purchased share swaps in the build-up to its creeping takeover bid for Continental AG. In the course of defending itself from Schaeffler’s unsolicited 11.3 billion euro bid, Continental’s management cried foul and called in Bafin the German federal financial regulator. The officials cleared the takeover bid itself, but are reportedly still investigating the legality of the so-called creeping part of the takeover. The fact that Prof Habersack, himself a member of the board of trustees of the German Banking Law Association, has leant his support to Conti’s case, could suggest the legal angle will continue to be a key role in the company’s defence plan.

In a report commissioned by Continental AG Prof Habersack concluded that Schaeffler’s methods demonstrate “a clear infringement of the reporting and notification provisions of the German Securities Trading Act and Securities Acquisition and Takeover Act.”

1st August 2008/by Tyrepress Editors

IndianOil to Establish £90m Synthetic Rubber Facility

IndianOil, the largest company in India in terms of sales and profit, intends to establish its first styrene butadiene rubber (SBR) facility. This plant, located at Panipat in the north of India and to be built at an investment price of Rs 7.61 billion (£90.55 million), will be 48 per cent owned by IndianOil. The company plans to offer two further investors respective shares of 32 per cent and 20 per cent in the 120,000 tonne per annum emulsion SBR project.

31st July 2008/by Tyrepress Editors

Kumho Says It Has Share Buyer

Kumho Asiana Group claims it has found an investor to buy out Cooper Tire & Rubber Co.’s share in Kumho Tire Co. The unnamed buyer would take over Cooper’s 11% stake in the South Korean tiremaker, shares valued at around $110 million.

“We have found an investor to take over the Kumho Tire stake and we are at the final stage of closing the deal,” said a Kumho Asiana official in news reports. “We should be able to announce the details soon, on around August 1. The investor is foreign.” (Tire Review/Akron)

30th July 2008/by Tyrepress Editors

Michelin Shares Fall Nearly 5% Due to Earnings Worries

Michelin & Cie shares fell 4.8 per cent on July 28 following a published report that the tyremaker’s first-half earnings have failed to meet management targets. Shares fell 2.31 euros to 45.49 euros, furthering the stock’s decline this year to 42 per cent and valuing the company at 6.6 billion euros.

According to a French financial newsletter, Michelin will announce cost-cutting measures at its July 30 earnings presentation, and jobs cuts will also possibly be tabled. Profits have been whittled away by weakening demand for cars in mature markets, which has made it harder to pass on raw material price increases to customers, Some analysts, including London based Adam Jonas from Morgan Stanley, have cautioned that Michelin may find it difficult to implement recently announced price increases.

29th July 2008/by Tyrepress Editors

Conti’s Rearguard Action Takes Shape

As an increasing number of voices speak out in favour of the proposed Conti/Schaeffler merger, Continental AG executives have called in a number of high profile investment banks to advise it on how best to defend its position. The most recent addition to this team is Deutsche Bank, which joins Goldman Sachs and JPMorgan as advisors.

The strategy behind the defensive manoeuvre appears to have two key objectives: to wrest complete control out of the clutches of the rapidly advancing Schaeffler; and to raise the suitor’s bid. Germany’s Handelsblatt reported that Conti chief executive, Manfred Wennemer told board members 89.74 euros per share (roughly 30% higher than the Schaeffler’s current 70.12 euros per share bid) is a ‘fair market price,’ for the tyre and automotive supplier. Other sources quote board members as saying 90 to 100 euros a share would be better. Could this be the target level the defence team will be seeking to achieve? And if so, how can Conti defend its position?

29th July 2008/by Tyrepress Editors

Cooper to Sell 10.71% Kumho Share

Kumho Tires is looking for investors to acquire a £54.9 million share in itself currently owned by Cooper Tire & Rubber, reports a company spokesperson. The US based firm intends to sell the 10.71 per cent share it acquired in 2005 for 109.8 billion South Korean won.

Cooper has a right to sell the shares at 14,650 won per share, the spokesperson said, however Kumho shares are currently down 3.1 per cent, at 8,500 won. It is thought that Kumho will face difficulties finding investors.

29th July 2008/by Tyrepress Editors