Continental AG: Continental resolves capital increase and determines terms of offering

Continental AG / Capital Increase06.01.2010 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted byDGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.---------------------------------------------------------------------------NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN ORINTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN.Hanover, January 6, 2010. The executive board of Continental AG hasresolved today, with the consent of the supervisory board, to increase theshare capital from EUR 432,655,316.48 by nominal EUR 79,360,000 to EUR512,015,316.48 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 toexisting shareholders of Continental AG. The executive board and thesupervisory board of Continental AG have set the subscription price at EUR35.00. A syndicate led by Deutsche Bank AG, Goldman Sachs International andJ.P. Morgan Securities Ltd. have agreed in an Underwriting Agreement datedtoday to firmly underwrite the 31,000,000 new shares at the saidsubscription price of EUR 35.00 per share subject to market standardconditions and to offer the new shares for subscription to existingshareholders of Continental AG at the subscription price.Continental AG will receive gross proceeds from the rights issue of EUR1.085 billion. The capital increase is intended to reduce the debtobligations of the Conti-Group from a syndicated credit facility inconnection with the financing of the acquisition of Siemens VDO and willallow payments from the Forward Start Facility agreed by Conti in December2009 with a majority of the lending banks of the syndicated creditfacility.Subject to the approval of the securities prospectus for the rights issueby the German Financial Supervisory Authority (BaFin), the shareholders mayexercise their subscription rights during the subscription period which isexpected to last from January 12 through January 25, 2010 (including) at aratio of 2 new shares per 11 existing shares. Continental AG intends toorganize trading of the subscription rights on the Frankfurt Stock Exchangefrom January 12, 2010 until January 21, 2010 (including). The new shareswill 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 owneda combined 88.9% of the company's share capital prior to the capitalincrease, have agreed with the banking consortium to neither exercise theirsubscription rights nor transfer such subscription rights to third parties.Upon the completion of the rights offering, these major shareholders areexpected to hold an aggregate of 75.1% of the increased share capital ofContinental AG.A syndicate led by Deutsche Bank AG, Goldman Sachs International and J.P.Morgan Securities Ltd. have already placed approximately three quarters ofthe new shares underwritten in their own name by way of a private placementto a small number of institutional investors. The remaining shares shall beplaced by way of an Accelerated Bookbuilt Offering (ABO) following theapproval of the securities prospectus. For those 11.1% of the new sharesrelating to which no commitment to waive the exercise of subscriptionrights exists, both the private placement and the placement in the ABO willbe made subject to the implementation of the rights offering in order tosecure that the existing shareholders of Continental AG who make use oftheir subscription rights will receive shares from the rights offering.Subject to the approval by the BaFin, a securities prospectus is expectedto be published on January 11, 2010 and will be available subsequently atContinental AG. The delivery and settlements of the new shares placed onthe basis of the existing commitments of the major shareholders inconnection with the previously described private placement/ABO will takeplace as early as possible time after the approval of the prospectus andthe registration of the capital increase in the commercial register,expected to take place on January 14, 2010. It is also contemplated tointroduce the new shares into trading on the regulated market of the stockexchanges of Frankfurt, Hanover/Hamburg and Stuttgart at that time. Thedelivery and settlement of the new shares subscribed in the rights offeringor otherwise not subscribed will take place on January 28, 2010.DisclaimerThis press information does not constitute an offer to buy shares or othersecurities of Continental AG and does not replace the prospectus.Investment decisions with respect to the shares or other securities ofContinental AG shall only take place on the basis of the prospectus whichwill be available after the approval by the German Financial SupervisoryAuthority (BaFin) free of charge at Continental AG.This press release does not contain or constitute an offer of, or thesolicitation of an offer to buy or subscribe for, securities to any personin Australia, Canada, Japan, or the United States of America (the 'UnitedStates') or in any jurisdiction to whom or in which such offer orsolicitation is unlawful. The securities referred to herein may not beoffered or sold in the United States absent registration under the U.S.Securities Act of 1933, as amended (the 'Securities Act') or anotherexemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act. Subject to certain exceptions, thesecurities 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 ofthe securities referred to herein has not been and will not be registeredunder the Securities Act or under the applicable securities laws ofAustralia, Canada or Japan.There will be no public offer of the securities in the United States.06.01.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.Media archive at www.dgap-medientreff.de and www.dgap.de--------------------------------------------------------------------------- Language: EnglishCompany: Continental AG Vahrenwalder Straße 9 30165 Hannover DeutschlandPhone: +49 (0)511 938-1068Fax: +49 (0)511 938-1080E-mail: ir@conti.deInternet: www.conti.deISIN: DE0005439004WKN: 543900Indices: MDAXListed: Regulierter Markt in Frankfurt (Prime Standard), Hannover, Stuttgart, Hamburg; Freiverkehr in Berlin, Düsseldorf, München; Terminbörse EUREX; Foreign Exchange(s) Luxembourg, SWX End of News DGAP News-Service ---------------------------------------------------------------------------