Continental, the German car parts supplier, on Wednesday vowed to fight for its independence, dismissing a hostile takeover approach by privately owned competitor Schaeffler as “unlawful” and “highly opportunistic”.

Escalating the tone of the clash between the companies, Manfred Wennemer, Continental’s chief executive, described his rival’s advance as “egoistic, high-handed and irresponsible”. He slammed the door shut on further talks, saying they would only make sense if Schaeffler, an industrial bearings group, increased its share offer to an acceptable level.

Schaeffler launched its audacious bid for control of Continental late on Tuesday. The secretive group revealed it already had access to 36 per cent of the shares via options held by a group of banks.

The move has ignited a rare domestic takeover battle in Germany and could lead to a private group acquiring a Dax-listed company for the first time.

Mr Wennemer on Wednesday said Schaeffler’s claim that it only wanted to achieve a minority position was “doubtful in the light of the recent talks”.

He claimed Schaeffler had secured its access to the company’s shares in “an unlawful manner”. However, Schaeffler fought back, saying the swap transactions it used conformed with current law. Bafin, the German watchdog, is investigating those transactions.

Continental’s share price on Wednesday rose slightly to almost €74 – above Schaeffler’s offer of €69.37 a share – amid investor hopes of a bidding war or an increased offer. People close to the situation said Schaeffler had priced the offer to fail and would be content with a minority stake which would still give it effective control given customary low turnout at shareholder meetings.

One institutional investor with more than 1 per cent of Continental said there was not much management could do. “But it is good that they are fighting, since Schaeffler obtained the shares surreptitiously without paying a premium.”

Jens Schattner, analyst at Sal Oppenheim, said a bidding war was highly unlikely. “I do not see anybody having the financial strength to make a bid.”

Continental could try to bring in another minority investor to dilute Schaeffler’s control, but under German law it would need the approval of its own shareholders to take such action.

Schaeffler could help finance its bid by selling Continental’s ContiTech division and its tyre division. People close to the situation said the group might have sounded out private equity investors, including Carlyle, while Bridgestone of Japan might be interested in the tyre division.

Get alerts on Automobiles when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.

Comments have not been enabled for this article.

Follow the topics in this article