Continental plots defence to $18 bln bid

Tag : Ball Bearing Parts
Continental chief executive ManfredWennemer withdrew from the public eye on Thursday to plot hisdefence against an unwanted $18 billion bid from family-ownedSchaeffler Group.
Earlier this week, ball-bearing maker Schaeffler announced a cashoffer worth at least 69.37 euros per share but Continental's stockprice is hovering at about 72 euros, signalling hopes thatSchaeffler will bid more or a rival buyer will emerge.
The takeover would be the biggest so far this year in Europe andput the combined group head-to-head with Robert Bosch for theposition of second-biggest global car-parts supplier -- behindJapan's Denso.
If Schaeffler succeeds in buying the group, which is three timesits size, it would also be the first time a German family businesshas taken over a company listed on the country's blue-chip DAXindex.
But Schaeffler's advances have stirred resentment at Continental'sheadquarters in Hanover, sparking a war of words between bothsides.
On Wednesday, Continental's Wennemer hit back at the offer, sayingit was too low and warning that the predator could ultimatelydismantle Continental.
Schaeffler, owned by German billionaire Maria-Elisabeth Schaeffler,countered it had no such plans, labelling Wennemer's tone"incomprehensible".
Wennemer has also turned to Germany's stock-market watchdog tointervene after Schaeffler won control of more than a third of itsshares through a web of options organised for it discreetly bybanks.

OBSTACLE COURSE
He could erect other obstacles, such as pushing through a capitalraising or finding a friendly white knight bidder. Analysts,however, see few companies that might make such a bid.
On Thursday, Italian tyre maker Pirelli said it had no any interestin either Continental or its tyres business, which might be sold inany break up.
Japanese rival Bridgestone declined to comment on speculation thatit might be interested in the German firm's tyres business.
Continental's share price traded down almost 2 percent on Thursdayto 72.61 euros after three days of steady gains when it climbedmore than a third.
Continental was built through a series of acquisitions of high-techcar parts makers, bought with money earned selling car tyres.
Weakened by an 11 billion euro debt pile borrowed to pay for itspurchase of VDO -- which makes the technology inside satellitenavigation and fuel injection systems -- Continental now faces aslowdown in car buying as high oil prices bite.
Over the past year, like many rivals, Continental's stock hassuffered. Before this week's bounce, it had halved in value.
It had long been speculated that a private equity firm might buyContinental, but these investors rely heavily on debt and thecredit crunch makes it harder for them to compete with oftencash-rich trade buyers.