Fears of takeover, foreign or otherwise, figure large in the minds of many European auto execs. These fears ostensibly caused the Porsche-VW shotgun marriage collegial partnership. Schaeffler's "sneak-up" takeover of Continental is fuelling a whole new round of paranoia. Daimler's market value has declined by 45 percent on the year; the weakness has placed the Stuttgart firm in the middle of the takeover mania. Reports emerged saying "a foreign hedge fund is buying a large number of shares in (Daimler)," followed swiftly by more rumors that Swedish hedge fund Cevian Capital was taking a position in the firm. Daimler now says that it has "no indication" that it is under assault. But that confidence is undermined by reports from Automotive News [sub] that Daimler has enlisted Deutsche Bank to watch its back. Deutsche Bank is reportedly helping Daimler find an "anchor investor" who could play white knight should a takeover materialize. Hedge funds, like most predatory creatures, tend to not give a lot of warning in advance of a takeover, so its hard to blame Daimler for freaking out over this one. Especially considering that the prime suspect, Cevian Capital, "does not see itself as a hedge fund but as an investor that pushes for changes in companies." Yikes!
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This is one thing that irks me most about public corporations. Who thinks a hedge fund will have any interest in any products Daimler makes, only in what their quarterly numbers are and what they can do to reduce costs and increase profits. They’ll introduce a beancounter as CEO (on $14 million a year) who will infuse the management structure with all his beancounter golfing buddies.
Maybe Daimler should prepare some poison pill by buying something so horrible and repugnant that no financial institute will come anywhere near them. Something like Chrysler.
Kizmet. Karma. What goes around comes around.
Looks like Daimler is going to be taken down a few pegs, after their “loverly” treatment of “partners” Mitsubishi (“go to hell – or back to mommy and daddy” – so Mitsubishi did), Hyundai (which said “um, we don’t want anything to do with you – we want our 10% of the company you bought back and are willing to pay – and did) and Chrysler (need I say any more)?
How do you say “paybacks are a bitch” in Schwabian German?
Daimler,
It’s not much fun when YOU’RE the bitch in a takeover!
You tried the same crud with Mitsubishi and they’re now doing very well with Japanese help.
What I don’t get is why didn’t Daimler try to buy back shares with the cash they had lying around to fend off any takeover? Instead they spent it on meaningless stakes in companies which bear no synergy with Daimler.
Seems like Herr Zetsche, is just as clueless as Juergen Schrempp…
Dieter does have a legitimate worry, since it took so long for him to be the King now he doesnt want anybody to topple his throne. A takeover is good as an early retirement, perhaps he didnt wanna to toss in the towel so soon.
Should the sales is down Dumbler may not have enuf cash to fend herself off, or cannot borrow as much to raise cash,kind of slowly see someone else chisel away the autonomy.
Being Hedge funds it cans stay anaonymous( am I correct?) until the s*it hit the fan the moving company coming in with new furnitures. And find your new desk was a fabricated crate stamped with Canadian lumber and made in China.
Damn, I’m gonna lose sleep tonight wondering what will happen to Dumbler if they are taken over by someone else – NOT! At least if it’s a hedge fund they won’t get rid of all the good designers, engineers, and middle managers and project leaders that really make the cars. And they won’t tell them they have to design and build cars their way, and use the cheapest materials possible, and old generation suspension pieces (and charge them a huge markup for it). But you never know! The good part will be seeing Dr. Z’s early retirement.
KatiePuckrik :
Daimler,
It’s not much fun when YOU’RE the bitch in a takeover!
LOL, well said :thumb:
Time for some “strip and flip” for them I guess =)
Not gonna happen. The rules in Germany are different.
Besides:
1. Daimler made $6bn last year.
2. Daimler owns lots of different assets. They haven’t had years of selling off the good stuff like the Americans. They could drop the 22% of Airbus that they own, the McLaren group, Freightliner, the Misubishi Fuso trucks operation…the Tognum defense operations…not to mention the very valuable 7% of Tata motors and the worthless 19.9% of ChryCo. I figure they could raise $15 billion plus from this, with the most valuable part being the big Airbus share.
3. Daimler is worth $90bn. That is about 15x the worth of GM.If you wanted to buy it, you would have to put down at least $15bn, and find someone to borrow the rest from. Which would be especially hard as no bank in Germany would be in the lending arrangement. Plus, you would probably have to pay a little more for the deal.
4. My conclusion: The hedge fund wants Daimler to dump non-core items like aerospace and defense and use the cash to buy stock,
Ask Schaeffler Group if the “German DAX” rules are worth the paper they are printed on…
Daimler is in serious waters and knows it.
$6B is peanuts. That’s one quarter of Continental’s sales.
And Daimler is only worth it’s current share price x outstanding shares. They can’t buy enough of their own shares to make enough of a difference and they know it, hence the call for help.