Now raising intellectual capital

A Blessing for Conti?


FRANCE-PROTESTS/Three things stand out about the “compromise” reached between German auto parts and tyre maker Continental and its biggest shareholder Schaeffler to oust Conti’s CEO Karl-Thomas Neumann in favour of Schaeffler’s own man Elmar Degenhart.

This is – by the way – far from a good deal as far as the Conti minorities are concerned. It thrusts the company ever more firmly into Schaeffler’s pocket. Many Conti shareholders are probably wishing they had sold when 75 euros a share was on the table.

But anyway, back to what the compromise may mean.

The first thing is that Schaeffler appears willing — for now at least — to  allow Conti to raise 1.5 billion euros – as Neumann  had wanted – despite the fact that a share issue is likely to dilute the indebted family-owned company’s holding in Conti since it would be unable to follow its money and subscribe to new shares. Of course this does not specify the terms on which a capital increase might be done – and there’s still no certainty that anyone will want to stump up the cash.

The second is the wording of a statement from Schaeffler on its objectives:

The Schaeffler Group continues to adhere to its objective of creating a global technology group consisting of the three divisions Automotive, Industrial and Rubber.