NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN.
Hanover, January 6, 2010. The executive board of Continental AG has resolved today, with the consent of the supervisory board, to increase the share capital from EUR 432,655,316.48 by nominal EUR 79,360,000 to EUR 512,015,316.48 by issuing 31,000,000 new shares from authorized capital (Authorized Capital 2007).
The capital increase will be implemented by way of a rights issue to existing shareholders of Continental AG. The executive board and the supervisory board of Continental AG have set the subscription price at EUR 35.00. A syndicate led by Deutsche Bank AG, Goldman Sachs International and J.P. Morgan Securities Ltd. have agreed in an Underwriting Agreement dated today to firmly underwrite the 31,000,000 new shares at the said subscription price of EUR 35.00 per share subject to market standard conditions and to offer the new shares for subscription to existing shareholders of Continental AG at the subscription price.
Continental AG will receive gross proceeds from the rights issue of EUR 1.085 billion. The capital increase is intended to reduce the debt obligations of the Conti-Group from a syndicated credit facility in connection with the financing of the acquisition of Siemens VDO and will allow payments from the Forward Start Facility agreed by Conti in December 2009 with a majority of the lending banks of the syndicated credit facility.
Subject to the approval of the securities prospectus for the rights issue by the German Financial Supervisory Authority (BaFin), the shareholders may exercise their subscription rights during the subscription period which is expected to last from January 12 through January 25, 2010 (including) at a ratio of 2 new shares per 11 existing shares. Continental AG intends to organize trading of the subscription rights on the Frankfurt Stock Exchange from January 12, 2010 until January 21, 2010 (including). The new shares will have full dividend entitlement as from January 1, 2009.
Continental’s current major shareholders Schaeffler KG (49.9%), M.M. Warburg & CO KGaA (19.5%), B. Metzler seel. Sohn & Co. (19.5%), which owned a combined 88.9% of the company’s share capital prior to the capital increase, have agreed with the banking consortium to neither exercise their subscription rights nor transfer such subscription rights to third parties. Upon the completion of the rights offering, these major shareholders are expected to hold an aggregate of 75.1% of the increased share capital of Continental AG.
A syndicate led by Deutsche Bank AG, Goldman Sachs International and J.P. Morgan Securities Ltd. have already placed approximately three quarters of the new shares underwritten in their own name by way of a private placement to a small number of institutional investors. The remaining shares shall be placed by way of an Accelerated Bookbuilt Offering (ABO) following the approval of the securities prospectus. For those 11.1% of the new shares relating to which no commitment to waive the exercise of subscription rights exists, both the private placement and the placement in the ABO will be made subject to the implementation of the rights offering in order to secure that the existing shareholders of Continental AG who make use of their subscription rights will receive shares from the rights offering.
Subject to the approval by the BaFin, a securities prospectus is expected to be published on January 11, 2010 and will be available subsequently at Continental AG. The delivery and settlements of the new shares placed on the basis of the existing commitments of the major shareholders in connection with the previously described private placement/ABO will take place as early as possible time after the approval of the prospectus and the registration of the capital increase in the commercial register, expected to take place on January 14, 2010. It is also contemplated to introduce the new shares into trading on the regulated market of the stock exchanges of Frankfurt, Hanover/Hamburg and Stuttgart at that time. The delivery and settlement of the new shares subscribed in the rights offering or otherwise not subscribed will take place on January 28, 2010.
This press information does not constitute an offer to buy shares or other securities of Continental AG and does not replace the prospectus. Investment decisions with respect to the shares or other securities of Continental AG shall only take place on the basis of the prospectus which will be available after the approval by the German Financial Supervisory Authority (BaFin) free of charge at Continental AG.
This press release does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America (the “United States”) or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan, or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the securities in the United States.