Life & Style | Motoring
Continental in talks with Schaeffler on stake sale
German car parts maker Continental held talks with Schaeffler about the family-owned group's interest in buying into the company, Continental said on Monday as its shares surged on hopes of a bid.
- Reuters
- Published: 00:08 July 15, 2008
Frankfurt: German car parts maker Continental held talks with Schaeffler about the family-owned group's interest in buying into the company, Continental said on Monday as its shares surged on hopes of a bid.
The comments, which followed a newspaper report that Schaeffler was poised to make a takeover offer, sent Continental's stock rising sharply, lifting its market value to nearly 10.8 billion euros (Dh61.5 billion).
"Continental AG confirms that one brief conversation about a possible engagement by Schaeffler Group in Continental AG took place at the end of last week," it said in a statement. "No further conversations took place. As soon as Schaeffler Group has substantiated its plans, the management board of Continental AG will evaluate these and communicate its views in due course," it concluded.
A spokesman for Schaeffler declined to comment.
Valuation
Over the weekend, the Financial Times reported Schaeffler was preparing a bid for Continental that would value the parts supplier at over 10 billion euros and was prepared to go hostile if its advances were rejected. The paper said it had lined up Royal Bank of Scotland to finance the deal.
At 0911 GMT, Continental shares were up nearly 23 per cent at 66.56 euros.
Schaeffler, which said it had sales of 8.9 billion euros last year, is significantly smaller than Continental, a highly profitable company that forecasts sales of over 26.4 billion euros in 2008 and an adjusted operating margin of more than 9.3 per cent.
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