FAG Kugelfischer Georg Schaefer AG (Schweinfurt, Germany) is reportedly in active negotiations with NTN Corporation (Osaka, Japan) and possibly another financial investor not from the bearing industry. FAG management's aim is to quickly craft and assemble the funding for an attractive alternative to INA Holding's hostile takeover bid for the company.

Privately-held INA put its surprise 11 Euro per share offer for FAG on the table September 9, 2001. Trading was halted on September 10, but since it began again on September 11, INA has accumulated over 25% of FAG's outstanding shares. INA's offer runs through October 22, 2001.

FAG management has vehemently rejected INA's offer and been actively pursuing other avenues. The company strongly urged shareholders to reject INA's bid as too low, not in the best interest of the company or its employees, and as misrepresenting FAG's future potential. FAG and INA are also waging aggressive campaigns in the German media.

As yet, FAG has no firm counter-offer on the table. However, many German media outlets are now reporting it is expected to be in the neighborhood of 13 Euro per share, plus a special one-time cash dividend.

Even if FAG does assemble the necessary financial backing - perhaps including new financing from Germany's second-largest bank, Hypo Vereinsbank - there is every likelihood INA will simply raise its offering price.

Also worthy of consideration is the fact that INA is now FAG's single largest shareholder. Any counteroffer which did not raise the per-share offering price could now be voted down.