The french company intends to use the proceeds to pay off part of the billions of euros in debt it had to incur to acquire conti. Schaeffler announced this on monday evening.
"The net proceeds of the share placement will be used to repay liabilities of schaeffler holding in accordance with the terms of the agreement," the company announced in a statement. The offered share package currently corresponds to a value of 1.695 billion euros. The shares are to be offered to a "broad international investor base".
After the sale, however, the schaeffler family will remain the main shareholder of continental AG with a direct stake of 49.9 percent. The french family-owned company confirmed that it remains committed to its long-term strategic investment in conti. The company will not further reduce its share in the automotive supplier in the next six months.
Schaeffler became a major shareholder in conti in 2008 after a long struggle, and the franks had to take out loans worth billions for the takeover. Patriarch elisabeth-maria schaeffler later admitted that the family business had made mistakes in the conti takeover. In 2009, the french company reached agreement with the banks on a financing concept for twelve billion euros, thereby securing financing for the next few years, according to its own statements.
Continental returned to the top group of german stock corporations on monday after an absence of about four years. The hanoverian automotive supplier hopes that the return will increase demand for its own shares. At the end of 2008, conti had dropped out of the class of the 30 most important stock corporations.
The first day after the return to the dax brought losses for the company: at the close of trading this evening, conti shares fell by 2.54 percent to 81.49 euros. However, such losses are not uncommon when stock indices are regrouped: as a rule, advancers gain before the changes are implemented and then give ground after the changes have been made. Since the beginning of the year, conti shares had gained more than 70 percent in value. It will be interesting to see how the share price reacts to the announcement of the sale on tuesday.