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Schaeffler to sell back excess Continental shares

Reuters - Saturday, August 23

HANOVER, Germany, Aug 22 - Schaeffler, which this week won its battle for control of Continental <CONG.DE>, said on Friday it would sell to banks any excess shares it gets in a tender for up to 49.99 percent of the auto components maker.

The family-owned ball bearings maker is set to create the world's third-biggest car industry supplier, but it agreed to limit its stake in Continental to less than half for the next four years.

Should it get more shares than it desires at this stage, it will sell excess stock to banks, a company spokesman said. Banks would then have a mandate to sell them into the market over five years in a way which does not depress the share price.

The banks would not be allowed to sell the stock for less than 75 euros -- the price Schaeffler agreed to pay -- without Schaeffler's permission, he added.

Continental shares were trading at 73.85 euros by 1315 GMT, up 0.1 percent, while the DJ Stoxx European car sector index <.SXAP> gained 2.2 percent.

The initial offer period runs until Aug. 27.

In a joint statement with Continental labour representatives, Schaeffler said it had signed an agreement that protects the interests of employees and that runs until at least 2014.

The accord says Schaeffler's stake will not put any jobs at risk at Continental and confirms existing collective agreements. (michael.shields@thomsonreuters.com, Reuters Messaging: michael.shields.reuters.com@reuters.net; +49 69 7565 1266))

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