takeover Archives - Page 9 of 16 - Tyrepress

Posts

Schaeffler’s Takeover of Continental Gets EU Approval

The EU Commission has granted approval of the takeover of Continental AG by the Schaeffler Group. According to an official statement released by the company shortly after the approval was granted on Friday 19 December, “the Schaeffler Group will now conclude the takeover without delay.” Schaeffler will pay 75.00 euros per share to the depositary banks of those shareholders who have tendered their shares to Schaeffler, on or around 8 January 8 2009. The depositary banks will then credit these payments to the shareholders’ accounts. According to the company, shares tendered for sale can be traded up until 2 January 2009.

“The takeover of Continental AG is a decision of far-reaching strategic importance for the Schaeffler Group. With Schaeffler and Continental we’re bringing together two excellently positioned German technology leaders. This merger will create one of the most successful global automotive suppliers with outstanding expertise in the high-growth fields of energy efficiency and alternative powertrain systems. It is our target to spearhead the global market,” emphasized Dr. Jürgen M. Geissinger, Schaeffler Group president & CEO.

22nd December 2008/by Tyrepress Editors

Conti Shares Fall Amid Rumours of EU Decision Delay

Continental today fell 6.5 per cent as stock brokers speculated the EU decision on the validity of the company’s proposed takeover by Schaeffler Group may be delayed. “These decisions usually come by noon (local time) and as there has been no accouncement yet, investors are getting worried that the decision may be delayed,” a Frankfurt-based told AFX news agency.

19th December 2008/by Tyrepress Editors

Conti/Schaeffler EU Ruling Due Tomorrow

Continental AG shares rose to one-month high as the stock market speculated that European regulators will give the Schaeffler Group takeover bid the green-light tomorrow. Bloomberg reported that Conti stock surged 19 per cent to 42.70 euros during the day’s trading.

Meanwhile dormant tensions in the seemingly inharmonious takeover appear to be mounting again following newspaper reports that Schaeffler is planning to force out Hubertus von Gruenberg. Continental’s supervisory board chairman. According to Handelsblatt, “Von Gruenberg wants to establish a ‘leading role’ for Continental within the merged company, an effort that Schaeffler CEO Juergen Geissinger is attempting to thwart.”

18th December 2008/by Tyrepress Editors

Is Schaeffler Walking Out on Continental Investment Agreement?

Schaeffler Group has signalled that it is willing to consider abandoning the investment restrictions it agreed earlier this year to pacify its hostile takeover of Continental – much to the annoyance of Conti executives. Schaeffler sources told Financial Times that the investment agreement had become obsolete “as it was constructed at a time when the world was very different.” The agreement limits the ball-bearing maker to a 49.99 per cent stockholding in Continental and upholds the tyre and automotive supplier’s independence as a legally separate entity.

Schaeffler initially said it was only interested in holding a minority stake in Conti, however, as it stands the company holds the rights to more than 90 per cent of the shares. In addition, on 14 December Frankfurter Allgemeine Zeitung’s Sunday edition printed an interview with Maria-Elisabeth Schaeffler and company chief executive officer Juergen Geissinger, in which the executives revealed they are seeking four seats on Continental’s supervisory board. According to Reuters, Schaeffler would like the four seats it is seeking to be occupied by company CEO Juergen Geissinger, CFO Thomas Hetmann, Maria-Elisabeth Schaeffler and her son Georg.

15th December 2008/by Tyrepress Editors

Conti Board Refuses to Sell Rubber Business

Continental AG stood up to its major shareholder and takeover suitor, Schaeffler Group, on Wednesday (10 December) by refusing to sell the group’s tyre and rubber products business. Sources told the Financial Times that Conti’s supervisory board unanimously decided not to sell the company’s “rubber” unit, apparently rebuffing Schaeffer’s demands. Instead Conti’s board announced plans for a three-digit million euro cost cutting programme and said it is considering axing its dividend payment. FT’s source was also reportedly keen to stress that Continental should be in the driving seat of any industrial cooperation between the two companies: “We want to make it clear that, if David and Goliath go together, Goliath has to be in the drivers seat.”

Schaeffler Group’s 12.1 billion euro hostile takeover bid, launched earlier this year, cooled down slightly when former CEO Manfred stepped down and Dr Karl-Thomas Neumann took over in September. However, while FT reports that Neumann was Schaeffler’s preferred candidate, the newspaper also points out that “he has acted solely in the interests of Continental.”

11th December 2008/by Tyrepress Editors

Schaeffler Confident of EU Merger Approval in 25 Days

Schaeffler Group has received the go-ahead from the EU Commission to formally file its Continental AG merger notification, but speculation remains that Conti’s new owners may sell some of their assets. In an official statement Schaeffler Group reported that it will submit the documents required for initiating a merger clearance examination today (14 November 2008). “We will implement our strategy according to plan and conclude the takeover after approval from the EU Commission,” said Dr. Jürgen M. Geißinger, Schaeffler Group president and CEO.

However while Schaeffler’s public comments are fine-tuned to communicate that the merger plans are on track, details of whether or not tyres will figure in any possible future merged company are noticeable by their absence. In the EU approval statement Dr. Geißinger said Schaeffler would aim to combine the two companies strengths in “mechanical, mechatronic and precision components for engines, transmissions and chassis with Conti’s strengths in electronic, software and system solutions for engines, chassis and the passenger compartment” so together Schaeffler and Continental can “develop systems for reduced fuel consumption such as hybrid and electrical drives.” Tyres were not defined as one of Continental’s strengths.

14th November 2008/by Tyrepress Editors

Transense Technologies Named as ‘Perfect Acquisition Target’

Research conducted by Business XL and patent mapping specialist Cambridge IP has named tyre sensor develop Transense Technology as a “perfect acquisition target.” According to the report, patent-rich ventures with healthy balance sheets and low market valuations are perfect takeover targets for companies seeking to expand.

Business XL identified AIM’s 68 most IP-intensive companies, which hold more than 5,000 patents between them, and has named the largest, smallest, best-performing, most cash-rich companies on the market. The study reveals that the ten most patent-rich companies on the market have filed more than 2,500 patents, while the ten most cash-rich intellectual property (IP) companies have £242 million on their combined balance sheets.

10th November 2008/by Tyrepress Editors

KKR, Bain and Allianz to Bid for Conti’s Tyre Unit

A group of three private equity firms are reportedly planning takeover offers for Continental AG’s tyre and rubber units. According to reports originating from the German Handelsblatt newspaper, Kohlberg Kravis Roberts, Bain Capital and Allianz Capital Partners are all preparing bids for the businesses. On 23 October, Bloomberg reported that financial investors were considering making offers for Continental AG’s tyre and rubber divisions. According to this report, the potential offers would value the company at 7 – 11 billion euros.

While there has so far been no independent verification of the reports published by Handelsblatt, they are definitely plausible. In 2006 Bain Capital made an offer for the German tyre and automotive supplier, but was rebuffed. This was followed by reports that General Capital, Goldman Sachs, Permira and KKR would join forces to attempt a purchase. This means two of three potential bidders named by news reports were previously prepared to bid for Continental in 2006 when the group’s share price peaked at a level almost three times higher than it is today.

Speculation that divestitures were on the horizon began almost as soon as the initial takeover bid became apparent in July. However, rumours gained momentum on 8 October when it emerged that Continental executives had already mandated Perella Weinberg to look into the possibility of a sale. At the time, the Financial Times Deutschland reported that Continental’s move was: “less a question of selling it than of finding possible partnerships.” However, the latest reports appear to contradict this.

The break-up of the so-called new Continental that executives and managers worked so hard to build would also contradict Schaeffler’s repeated assurances that it never intended to do this. In fact, the assurance that the group would remain intact became a key part of the Schaeffler group’s persuasion of various board members this summer. However, Handelsblatt points out the agreement Schaeffler finally made left room for Continental’s management to make this decision itself. Throughout the takeover battle, then CEO Manfred Wennemer led a series of defensive manoeuvres designed to stave off this kind of break-up. Now that he has been replaced by automotive electronics specialist Dr Karl-Thomas Neumann, there doesn’t appear to be any key leadership figure representing the “defensive” perspective.

Current chief executive Karl-Thomas Neumann, is expected to inform Continental AG’s supervisory board about the equity houses’ bids today (Monday 27 October).

27th October 2008/by Tyrepress Editors

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.

24th October 2008/by Tyrepress Editors

Schaeffler Buys More Conti Shares

Schaeffler Group today bought a further batch of stock already under its control in an effort to reduce the cost of the deal Continental takeover deal. It was the fourth time Schaeffler has done this. The group reportedly bought 1.05 million shares yesterday.

According to Bloomberg, Schaeffler has bought 3.17 million tendered Continental shares since the company’s offer expired on 16 September – equal to roughly 2.43 per cent. The average price paid was about 61.50 euros, which would amount to a savings of almost 43 million euros ($58 million) versus the price due under the offer. Schaeffler spokesperson Detlef Sieverdingbeck said the recent move is not likely to be the last purchase: “If further purchases make financial sense, we will continue to buy.”

16th October 2008/by Tyrepress Editors

Continental Shares Gain 2.2%

Shares in Continental AG went up 2.2 per cent today (15 October) after majority shareholder, Schaeffler Group said it had purchased 834,000 shares in the German tyre and auto parts specialist as part of its takeover easing worries the deal could run into financing difficulties. “Both Schaefler’s announcement yesterday that it is not having trouble financing the Continental deal and news today that it has purchased some 830,000 odd shares in Continental is helping the stock. Schaeffler is going ahead with the deal and it is creating support for Continental stock in the market.” a Frankfurt-based trader told Interactive Investor.

15th October 2008/by Tyrepress Editors

Tyre Companies are Prime Takeover Territory

A new report is suggesting that the effects of the wider financial meltdown are going to result in a series of takeovers and sell offs that will “sweep the market.” According to the Plimsoll Publishing report, a combination of needs is forcing smaller companies to consider selling to their larger rivals and larger players are looking to buy their smaller rivals to diversify and develop their businesses.

“It has a great deal to do with necessity. Many of the larger players in the market, despite the downturn, are desperate to find new ways to develop their business, but with the current climate, costs are being cut and business development is being slashed. So they need options to help them protect their futures and tap into exiting revenue and profit streams. Financing a series of small acquisitions at key niche players in the market will give them: a quick route to increasing sales for relevantly low cost; and a foothold in the emerging sectors of the market,” senior analysts David Patterson commented.

14th October 2008/by Tyrepress Editors

Credit Crunch Puts Brakes on Schaeffler/Continental Deal

The credit crunch appears to be taking a bite out of the biggest takeover in the tyre world this year. According to various news reports, syndication of the 16.1 billion euro ($21.92 billion) loan behind Schaeffler Group’s bid for Continental AG is “on hold” because of the recent turbulence in credit markets. Unnamed bankers close to the deal told Reuters the loan had been paused while Schaeffler assessed its position. Syndication of the loan is expected to resume when there was clarification of Schaeffler’s strategy, the bankers said.

Later reports quoted a Schaeffler spokesman as saying the company has binding financing commitments from six banks on the deal.

14th October 2008/by Tyrepress Editors

Schaeffler to Apply for Antitrust Clearance

Following renewed talks with the EU Commission, the Schaeffler Group expects to submit the final draft of its antitrust clearance application (relating to its Continental AG purchase) during the course of the next week. The statement from Schaeffler’s Herzogenaurach headquarters could be seen as the company’s answer to reports that investors are concerned about the speed of Schaeffler’s application to the EU. 48 hours earlier the Financial Times reported hedge funds associated with Schaeffler’s takeover of Continental are “becoming increasingly nervous about the potential 12 billion (£9.4 billion) deal closing.”

Schaeffler’s statement says the group believes it is in the best interests of both company to achieve “a rapid conclusion of the process by preparing the notification in the best possible manner.” Explaining the delay of the group’s submission to the EU, the statement added: “…the EU Commission asked Schaeffler to specify the worldwide potential relations between products in neighbouring markets and corroborate this statement with financial figures. Since corresponding information is not centrally available at Continental AG, the compilation of such information is a time-consuming procedure.

8th October 2008/by Tyrepress Editors

LSUK Goes into Administration

Car parts wholesaler LSUK has gone into administration following a failed takeover attempt by competitor Euro Car Parts. All 53 branches will close, with 600 workers being made redundant. The new owners reluctantly came to the decision “after a considerable amount of non-stop work and investment into LSUK” during the five days following Euro Car Parts’ takeover bid over on 29 September. Despite their efforts Euro Car Parts’ directors realised that they had no option but to place LSUK into administration with effect from Monday 6 October 2008. This includes all 53 LSUK Branches, including MI Diesel Products, Protech Automotive (UK) and Yeovil Rewind.

In a statement on the failure of the deal Euro Car Parts explained its reasons for putting LSUK into administration: “Unfortunately, it became clear, very quickly, that it was simply going to be impossible to continue with investment without the required support, which was not forthcoming.”

6th October 2008/by Tyrepress Editors