Continental chairman Hubertus von Gruenberg (pictured) is warning that his company tread carefully so that if the proposed takeover by family-owned Shaeffler becomes a reality, the tyre manufacturer does not leave "scorched earth" in its wake. The chairman believes Schaeffler could help to fund the company's automotive parts business should the bid prove successful.
However, obstacles have started to threaten the proposed merger between the two German companies. Worker unions have demanded that Schaeffler provide evidence that it will not break up the company or cut jobs and the country's financial watchdog has ordered the family-owned firm to raise its bid price in line with national regulations.
"When the takeover is likely, I would prefer us not to leave scorched earth," von Gruenberg was quoted, speaking to German trade publication Manager Magazin. "For the automotive parts business in particular, I could well imagine forms of financing beyond that of a listed stock company."
He rejects the idea that he knew of the takeover bid ahead of time, saying the offer from the vehicle parts manufacturer came "out of the blue".
Revelation of von Gruenberg's openness to the bid comes as worker unions raised concerns over the clandestine way Schaeffler accumulated enough options and shares to launch a hostile approach for Continental.
"A friendly solution has indeed become more difficult, but it is not impossible," said works council and supervisory board member Michael Deister.
He said unions would be more open to Schaeffler's advances if a number of its questions were answered. These included assurances that Schaeffler would not cut jobs or break up the company and that the suitor would reveal its financing.
Adding to complications, German financial watchdog Bafin has ordered Schaeffler to increase its offer slightly to €11.3 billion, in line with regulatory requirements that bids must match the average share price of a company over the past three months.
The watchdog is presently investigating Schaeffler's "creeping takeover" tactics to make sure they complied with German disclosure rules.
Continental puts brakes on Schaeffler takeover bid