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Continental rejects takeover offer by the Schaeffler Group
- Opportunistic approach does not reflect the full value of the Company
- There is no convincing strategic rationale for a business combination
- Schaeffler is trying to achieve control over Continental in an unlawful manner
- Continental is strongly positioned in its current form for the future
On Tuesday, Continental AG was informed by the Schaeffler Group about their decision to make a takeover offer for the company for €69.37 per share in cash. The Executive Board of Continental rejects the offer. The offer is highly opportunistic, does not come close to the true value of Continental, does not create trust and lacks a convincing strategic rationale.
The Schaeffler Group takes advantage of the current challenging equity market environment to acquire control over a strongly positioned technology company and to avoid paying an appropriate premium to the other shareholders of Continental. According to our analysis, the Schaeffler Group has secured access to 36 percent of the outstanding capital of Continental in an unlawful manner - with the help of derivative positions and collaborating banks. This would result in a comfortable voting majority at the shareholders meeting and may even lead to a qualified voting majority.
The public statements, that the Schaeffler Group only aims to achieve a minority position and intends to leave the sound structure of Continental unchanged, are doubtful in light of the recent talks. The Executive Board of Continental therefore views the approach of the Schaeffler group as not in the interest of the company and its shareholders.
Continental always welcomes long term investors and has addressed the approach from the Schaeffler Group in an open and constructive way. The Executive Board of Continental was therefore also willing to support a financial investment of 20 percent in the company. However, the Schaeffler Group insisted on a controlling stake of more than 30 percent.
The strategic benefits of a closer collaboration of both companies are very limited. Schaeffler would benefit from Continental, but Continental not from Schaeffler. Continental has an outstanding potential as a standalone company in its current form.
The Executive Board of Continental will continue to act in the best interest of the company and all of its stakeholders also in this manner.
The Executive Board and Supervisory Board of Continental will after further specification of the intention of the bidder and after publication of the offer document take into consideration with due care the interests of the company, its shareholders, employees and business partners and will opine on the offer in the context of the legally required response according to § 27 WpÜG.
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