2023 Author: Eric Donovan | [email protected]. Last modified: 2023-05-21 15:44
The automotive supplier Continental wants to drive the price up in the takeover battle with the Schaeffler Group. A few billion euros more would have to be packed on top of the previous one, they say.
In the takeover poker with Schaeffler, Conti wants to drive up the price. The family company would have to add a few billion to the current offer so that Continental would agree to the takeover by Schaeffler - or be satisfied with a stake of 20 percent: these are the conditions of the DAX group from Hanover. The current takeover offer of the Schaeffler Group of around 11.4 billion euros was rejected by the supervisory board on Wednesday, thereby strengthening CEO Manfred Wennemer's back in a “fateful hour”. Schaeffler, on the other hand, seems to have prepared for a long battle.
Waiting for the "white knight"
At the same time, Conti continues to work on defending against the takeover. The big question is whether a “white knight” can still be presented - a friendly, major investor who joins Conti. In Hanover, they showed themselves to be combative on Thursday: "We are only in the first half of the game, Schaeffler is still a long way from winning," says the automotive supplier. Wennemer could still have an ace up his sleeve.
An agreement with Schaeffler is “worth striving for,” Wennemer said on Wednesday evening after a crisis meeting of the supervisory board - but only under the conditions mentioned did the management board have the support of the supervisory board to start direct negotiations with Schaeffler. Schaeffler reacted in the evening: It was welcomed that Conti considered an agreement with Schaeffler to be “desirable”. Schaeffler is now waiting for Continental AG to "specify" its ideas.
So far, Schaeffler has offered Conti shareholders the minimum price of 70.12 euros per share - which means that the offer values the tire manufacturer and automotive supplier at 11.4 billion euros. From Conti's point of view, this is far too little. Industry analysts consider a price between 80 and 100 euros to be justified. Conti does not give an exact price target. For the purchase of the Siemens division VDO alone, Conti had left 11.4 billion euros last summer, but was in heavy debt. Then the share crashed, the value halved - Continental became a bargain, Schaeffler took hold of it and secretly secured access to a large block of shares.
Access to 36 percent
The Schaeffler Group from Herzogenaurach already has access to a share package of around 36 percent directly and via controversial, so-called swap transactions - if the banks involved in the deal play along until the end. The swap deals have a share of 28 percent. Conti considers the procedure to be unlawful and, according to reports, is relying on the financial supervisory authority BaFin to block the swap transactions for the time being. But if Schaeffler gets the 36 percent, the family company would in fact have the say at Conti because of the low attendance at general meetings.
It seems more than questionable whether Schaeffler will respond to the Conti conditions. So far, the group from Herzogenaurach has insisted on a share of more than 30 percent. It is also unlikely that Schaeffler should increase the price and spend more than necessary. Because the Franconians have created a more than good starting position for themselves in a tricky and, from their point of view, legal - and can actually sit back.
"Schaeffler has no time constraints, but basically all the time in the world," said the auto expert Ferdinand Dudenhöffer from the Gelsenkirchen University of Applied Sciences. With the lowest possible takeover offer, Schaeffler wants to create the option of gradually buying in at low prices in the future. Conti is shaken by the bad market, high interest charges, rising raw material prices and the VDO integration. "The castle is under permanent siege."
Schaeffler itself had already made it unmistakably clear that the group would not allow itself to be dissuaded from its project despite the resistance from Hanover. Schaeffler Managing Director Jürgen Geißinger said: «We are characterized by a long-term strategic orientation and pursue our goals with perseverance.» (dpa)