INA Holding's hostile acquisition bid for FAG Kugelfischer Georg Schaefer AG is meeting with some difficulty, now with only a few days left in its offering.

While FAG management is "firmly resolved" to continue fighting an INA takeover, it is rapidly running out of options and time. Instead, INA's roadblock may turn out to be German institutional investors.

Institutional investors and hedge funds have recently been acquiring large blocks of FAG shares on the open market, at prices above INA's standing offer of € 11 per share. While FAG shares initially traded at just under € 11 in the days following the acquisition announcement, they have recently been trading at slightly over € 11.

The rate of INA's share acquisition has slowed dramatically as a result, according to analysts. Institutional ownership, in the meantime, surged to almost 20%.

INA reported to German media yesterday that it sees no need to raise its offering price. However, the company has also said it will only pursue the takeover if it is able to acquire 75% of FAG's outstanding shares.

INA was able to acquire over 25% of FAG's shares relatively quickly, making it FAG's largest shareholder. But acquisition apparently stalled quickly after institutional investors began offering more than 11 Euros per share.

Few believe the institutional investors want to hold FAG shares in the long run. Instead, they are simply seeking to control large enough blocks that INA will be forced to offer them a premium. Most also believe INA can afford and will eventually be willing to pay as much as € 13.

INA has never ruled out extending or changing its offer. "If we don't reach 75%, we will have to review the situation," said an INA spokesman.