530 19 A Listed Company as the Target
Schaeffler;^65 (b) Schaeffler had been able to acquire Continental shares as a result
of a declaration of intent;^66 or (c) voting rights were to be exercised jointly.^67
BaFin was unable to find evidence of any such agreements. For instance, BaFin
had not been able to establish that Merrill Lynch had been acting as coordinator of
swap agreements for Schaeffler or that shares acquired as cover were to be deliv-
ered in any subsequent takeover bid (for concerted action, see below).^68
Third, the swap agreement had not created any reporting requirement for
Schaeffler in respect of holding other financial instruments,^69 since the cash-
settled total return equity swap conveyed no claim to delivery of Continental
shares. The only financial instruments which were reportable for the purposes of
the Securities Trading Act were those which entitled the holder of the financial in-
strument to unilaterally acquire shares with voting rights attached that had already
been issued.
Fourth, the BaFin did not find any grounds for believing that Merrill Lynch had
breached voting rights reporting requirements.
As a result, Continental AG, Schaeffler KG, and the partners of Schaeffler KG
agreed on the terms of Schaffler’s investment.^70 Schaeffler KG agreed to increase
the offer price. The Investment Agreement, which could not be terminated by the
parties before spring 2014, contained terms to safeguard the interests of Continen-
tal AG and its shareholders, employees and customers. Schaeffler undertook to
limit its position to a minority shareholding in Continental AG (up to 49.99%) for
a period of four years. Furthermore, Schaeffler agreed to compensate Continental
AG for possible negative effects caused by change-of-control clauses in the exist-
ing financing agreements of Continental AG and for negative tax effects resulting
from Schaeffler’s shareholding.
Word of warning. Both Porsche and Schaeffler still had to finance their share
buys and option deals. During the financial crisis, this became increasingly diffi-
cult. Schaeffler ended up being taken over by the much larger target company.
IFIL and Exor. Fiat is controlled by IFIL which in turn is controlled by the Ag-
nelli family. In 2005, Fiat announced it would not repay in cash a €3 billion con-
vertible loan from a consortium of banks. This meant that IFIL risked losing con-
trol of Fiat. IFIL nevertheless intended to keep control.
(^65) § 30(1) sentence 1 nr 2 WpÜG, § 22(1) sentence 1 nr 2 WpHG.
(^66) § 30(1) sentence 1 nr 5 WpÜG, § 22(1) sentence 1 nr 5 WpHG.
(^67) § 30(2) WpÜG, § 22(2) WpHG.
(^68) See also Fehr B, Jahn J, Mit Swap-Geschäften zum Übernahmeerfolg, FAZ, 9 August
2008, p 13: “Der Clou der Konstruktion liegt darin, dass die Bank genau am Ende der
Laufzeit die zu Absicherungszwecken erworbenen Conti-Aktien verkaufen muss, wenn
sie alle Kursrisiken ausschalten will. Wie sich dem Prospekt entnehmen lässt, hat
Schaeffler vor, das Ende der Swap-Laufzeit genau auf das Ende des Übernahmegebots
zu legen. Prinzipiell steht es der Bank dann frei, an wen und zu welchem Kurs sie ihre
Aktien verkauft. Doch spricht einiges dafür, dass es für die Bank dann wirtschaftlich
sinnvoll sein wird, die Wertpapiere Schaeffler anzudienen.”
(^69) § 25(1) WpHG.
(^70) Schaeffler KG and Continental AG, press releases of 21 August 2008.