Continental rejects Schaeffler’s takeover bid

On July 16th, the Schaeffler Group informed Continental of its decision to make a cash offer of €69.37 per share to acquire the company.
According to Continental, Schaeffler is taking advantage of the current challenging equity market environment to avoid paying an appropriate premium to acquire control over a strongly positioned technology company.
Continental claims that Schaeffler secured access to 36% 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.
WhileSchaeffler publicly declared its intention to achieve a minority position and leave the sound structure of Continental unchanged, Continental was willing to support a financial investment of 20% in the company.
However, when Schaeffler insisted on a controlling stake of more than 30%, Continental decided that such a deal would benefit Schaeffler but not Continental or its shareholders.
It's only a year ago that Continental made the biggest purchase in company history with the €11.4 billion acquisition of Siemens VDO Automotive -a move that shunted Continental into the Top 5 companies in this industry worldwide.
Contrary to Schaeffler's proposal, Continental believes it would be better off in the long run as a standalone company in its current form.