Schaeffler values itself at about 10 billion euros ($14.2 billion), the Herzogenaurach-based company said today in a statement, confirming a report by Bild. Bild cited unidentified supervisory board members as saying the valuation may complicate negotiations about a combination.
“The figure, determined by an investment bank, has nothing to do with the value Schaeffler could bring” to a merger, the closely held company said. “We’re astonished that such topics from confidential internal discussions between Schaeffler and Continental land in the media and give rise to damaging misinterpretations.” Hannes Boekhoff, a spokesman at Hanover, Germany-based Continental, declined to comment.
The two companies are burdened with a combined debt of 22 billion euros following takeovers in the past two years. Continental, Europe’s second-biggest car-parts maker and No. 2 tire manufacturer, is holding a supervisory board meeting on July 30 with ties to Schaeffler on the agenda. The board is likely to make “clear direction-setting decisions,” Chief Executive Officer Karl-Thomas Neumann said yesterday.
Neumann said on Apr. 23 that Continental is considering the sale of stock as well as divestments to help generate cash for a 3.5 billion-euro debt payment scheduled for August 2010. Continental has shareholder authorization to issue as many as 58.6 million new shares, which would raise about 1.5 billion euros at current prices.
Schaeffler, owned by the founder’s widow Maria-Elisabeth Schaeffler and their son Georg, accumulated its 11 billion euros in debt after buying 90.2% of Continental. A takeover agreement reached in August limits Schaeffler’s direct ownership of Continental to 49.9%, with banks holding another 40.3% on its behalf.
Schaeffler CEO Juergen Geissinger told Bloomberg on July 16 that his company needs more time to reach finance agreements with banks. He said the aim was a combination with Continental.
Lenders holding about half of Continental’s 11 billion euros in debt intend to challenge a merger with Schaeffler because of concerns that borrowing for the combined company would be too high, people familiar with the situation have said. (Tire Review/Akron)
