These days, whenever takeover rumors surface in Germany, they're accompanied by unsourced articles that claim the suitor has already acquired a significant minority stake through options, complicating any defense.
Blame ball bearing maker Schaeffler KG, which famously revived a technique pioneered by Porsche AG with its offer last year for Volkswagen AG.
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Before unveiling its €10.5 billion ($15.4 billion) offer for tiremaker Continental AG last month, Schaeffler collected a 38% Continental stake, most of it indirect through cash-settlement swaps. The technique has been dubbed a "creeping takeover" in Germany because it circumvents disclosure laws and allows a predator to quietly gain a significant stake in a target.
The latest report of a stealth approach appeared Tuesday with distressed Munich investor Aurelius AG now interested in loss-making turnaround specialist Arques Industries AG. According to Handelsblatt, Aurelius already has a sizeable -- indirect -- minority Arques investment.
Although both companies refused to comment, Arques is an obvious takeover target. Internal turmoil forced the company to appoint a new CEO earlier this spring after an interim CEO refused to sign a long-term contract. The group also slipped to a second-quarter loss of €36.3 million, which it blamed on write-downs related to asset sales.
Aurelius and Arques are also no strangers. Aurelius CEO Dirk Markus helped found Arques but left in 2004 after disagreements with founding partner Peter Löw, who resigned as Arques CEO last year. - Andrew Bulkeley
