Continental settles dispute with Schaeffler
Continental AG says it has "settled" its dispute with German ball bearing manufacturer the Schaeffler Group over Schaeffler's takeover offer. Schaeffler has agreed to limit its position to "minority shareholding" until at least 2012.
Schaeffler recently increased its offer price to 75 euros per share.
The company "has undertaken to limit its position to a minority shareholding in Continental (up to 49..99%) for a period of four years," say Continental officials.
"A further material element of the agreement directed at safeguarding the interests of Continental is the obligation of Schaeffler to compensate Continental for possible negative effects resulting from a so-called change of control in connection with existing financial agreements of Continental.
"Schaeffler has further (agreed) to give, in case of a possible sale of blocks of its minority stake in Continental within the next four years, a pre-emptive right to a person nominated by the guarantor... it has been agreed that there will be no changes to Continental's form of incorporation, its corporate seat, headquarters or business divisions; its listing on the stock exchange; its dividend policy; or an increase of its debt-to-equity ratio against the wishes of Continental.
"Continental expects smooth cooperation from the Schaeffler Group on the basis of the jointly reached investment agreement," officials continue. "It is the mutual goal to increase the value of Continental sustainably and on a long-term basis and to further develop Continental."