At a press conference in Frankfurt, FAG Kugelfischer AG CEO Uwe Loos announced the company is weighing two different strategies to combat the hostile takeover bid by INA Holding Schaeffler KG.

First, FAG is considering borrowing heavily for a special dividend payout, which would have the effect of pushing the company's shares above INA's 11 Euro per share takeover offer.

The second possible strategy still involves a counter-offer by another investor, bearing manufacturer, or consortium of investors.

FAG is hoping the offer they eventually put on the table will be enough to sway the majority of shareholders to hold onto their shares. FAG claims that a discounted cash flow analysis indicates the shares are worth between 13 Euros and 16 Euros each. "We are convinced that either option will lead to higher values for our shareholders than the INA offer," Mr. Loos stated.

Mr. Loos said he expects FAG management will be able to formally present the best offer to shareholders sometime within the next three weeks. "We are holding ongoing talks with financial investors as a matter of urgency," he said. He refused to reveal any further details of the counter-offers being considered.

Many analysts believe FAG's inability to act or find a partner to fight the INA bid is becoming a moot point. Most consider the takeover as essentially unstoppable, with FAG's efforts too weak and taking far to long to develop. After three weeks, INA already owns approximately 25% of FAG's outstanding shares, and is accumulating more every day via open market and private transactions at 11 Euros per share. INA is now FAG's largest shareholder by far.

More details have also come to light regarding FAG's long-term relationship with Dresdner Bank, which the bank severed late last week. Dresdner joined a consortium of banks, including the powerhouse Deutsche Bank, supporting the INA bid. It now appears that over 33% of FAG's outstanding shares are held by clients of Dresdner Bank.

INA's CEO, Jurgen Geissinger, said his company was not bothered by FAG's attempts to muster a challenge to the bid. "Mr. Loos will have his work cut out looking for an investor who will be prepared to come in alongside us, as the major shareholder at present, and offer more than 11 Euros in cash per share," he said.