Continental chairman Hubertus von Gruenberg called for a rational approach to the bid from the family-owned ball-bearing maker while sceptical labour leaders sought reassurances that Schaeffler would guarantee jobs.
"What we need is reason, not a fight at any price," von Gruenberg told Manager Magazin in an interview released a day before a Continental supervisory board meeting on July 23 to discuss Schaeffler’s unsolicited bid.
"If a takeover is likely, then I prefer that we don’t leave scorched earth behind," he added.
Senior labour representatives at Continental called on Schaeffler to provide evidence that it would not cut jobs or break up the company, steps that Schaeffler reiterated it would not take.
Continental works council and supervisory board member Michael Deister said he would be open to Schaeffler’s interest if it would, for example, reveal its financing.
This would help ease worker concerns that the bid might be funded in part by the sale of the company’s tyre business.
"A friendly solution has indeed become more difficult, but it is not impossible," Deister said.
Wennemer’s opposition to a nil-premium takeover has won the backing of some big shareholders. Two big institutional investors told Reuters they had urged Continental to hold out for a premium.
One said that the company was worth 80-100 euros per share and a takeover offer must value it at 20% on top of that. Another investor, whose company holds more than 1 million shares in Continental, said he would consider selling the shares for between 80 and 100 euros each. Both asked not to be identified.
Schaeffler, one-third the size of Continental, has offered the legal minimum of 70.12 euros per share, valuing it at roughly 11.3 billion euros ($17.99 billion).
Shares in Continental closed up 1.8% at 72.99 euros.
"It seems some investors count on Schaeffler increasing its offer and they hope that the transaction passes without any major resistance," one trader said.
A combination of the two companies won support from the head of carmaker and customer Opel, Handelsblatt newspaper reported.
"I believe the fusion would be positive," the paper quoted Hans Demant as saying in a preview of its July 23 edition.
Von Gruenberg, a powerful figure who made headlines in February as chairman of ABB by sacking CEO Fred Kindle, told the magazine he could "well imagine particularly in the auto parts business forms of financing outside of the exchange-listed joint stock company.”
He called for a swift resolution of the offer so management can turn its full attention back to tackling the significant problems facing the industry.
This marks the first time Continental’s chairman has taken a position on Schaeffler. Last week he simply released a statement saying the board would examine an offer in the interest of all shareholders and stakeholders.
Von Gruenberg’s role has come under increasing scrutiny since he is known to have close ties to Schaeffler CEO Juergen Geissinger, having served on the company’s non-executive board.
In an interview with Germany’s Focus magazine in December 2006, von Gruenberg said he had little sympathy for the capricious mood swings of the stock market, adding that going private offered some corporations a boost.
"Especially in the production of durable goods, in other words that in which Germany is strong, the quarterly thinking and share-price orientation of investors as well as the formal regulations can mean great competitive disadvantages," he said. (Tire Review/Akron)
