Continental, the tyre maker fending off a hostile bid from rival engineering company Schaeffler Group in Germany, has received legal opinion that claims that the way in which Schaeffler accumulated its stake in the company was illegal, suggesting it may be forced to unwind its position.

Schaeffler's bid, which was published for Continental shareholders yesterday, proved controversial after Schaeffler Group disclosed it had swap arrangements in place, giving it control of more than 30% of Continental’s shares.