FAG Kugelfischer Georg Schaefer AG, attempting to assemble a counteroffer to INA Holding's 11 Euro per share takeover bid, has reportedly lost its financial backer.

As late as yesterday, FAG was aggressively working to build a financial alliance involving NTN and another, undisclosed, investor. The counteroffer was expected to be in the neighborhood of € 13 per share, plus a one-time cash dividend.

FAG and NTN - unable to fund the offer themselves - brought in the other, strictly financial, investor from outside the bearing industry. This investor, reportedly London-based, pulled out Monday or Tuesday.

Through most of last week, FAG shares had regularly been trading at a four-year high, up to € 11.58, as investors anticipated a FAG counteroffer. Shares quickly dropped below 11 Euros yesterday as news circulated about the deal unraveling.

But FAG management is not admitting defeat. In a news conference, a FAG spokesman said, "If you declare people dead, they usually live longer." The company did admit the fate of negotiations to assemble a counteroffer was "unclear."

INA Holding's € 11 per share offer is open to FAG shareholders through October 22. The effectiveness of any counteroffer by FAG at this point is also in question; INA has already become FAG's largest shareholder, capable of voting down any non-financial anti-takeover actions.