As the offer period expires today, INA Holding's takeover bid for FAG Kugelfischer may be stalled. Individuals, who make up the majority of FAG's shareholders, are not tendering their shares to INA as expected. Without those shares, INA will not be able to acquire the 75% of FAG it says it needs to complete the takeover.

INA's acquisition offer of € 11 per share was announced September 10. Last week, as part of an agreement with FAG executive management for its support, the offering price was raised to € 12.

While institutional investors were previously expected to be the main holdout trouble spot for INA, in fact it has turned out to be the individual FAG shareholders who are unwilling to sell.

Many German shareholders are long-term investors. Anyone who bought FAG shares prior to October 1998 paid more than € 12, and that is turning out to be a larger percentage of the individual investors than anyone expected.

Believing they should receive significant premiums, not a loss, on such a takeover, many say INA's current offer gives them no real reason to sell.

German brokers report many shareholders are angry that FAG senior management negotiated "deeply self-serving" protections with INA in exchange for their support, while negotiating only a € 1 per share increase in the offer. It has been widely reported in the German media that INA was prepared to pay as much as € 13.5 per share for FAG.

As a consequence, FAG management's credibility has suffered greatly in the eyes of many shareholders - making them even less likely to follow management's urging to accept INA's offer.

This past Friday, European Union antitrust officials approved INA's takeover plan.