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 lent 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.” For its part Continental urged Bafin to “issue directives to not only nullify the illegal actions that are so damaging to the market, but also prevent the Schaeffler Group reaping the benefits of its illegal methods.”
Continental argues that Schaeffler did not properly adhere to voting right notification obligations and voting right attribution provisions in the swaps transactions. Habersack told newswires: “The scheme violated applicable law. The effective, proportionate and dissuasive reaction of the Bafin demanded by the EU legislator is the issue of a protective order stipulating that the shares that are subject to the Schaeffler swaps must not be transferred to Schaeffler.” (Tyres & Accessories/Staffordshire, U.K.)
