Demag Cranes rejects $1.3 billion offer by Terex
FRANKFURT (Reuters) - Demag Cranes D9CGn.DE has rejected the 880 million euro ($1.3 billion) bid from U.S. construction machinery maker Terex (TEX.N) as too cheap and strategically opaque.
It said its management and supervisory boards recommended that shareholders should not accept the 41.75 euro-per-share offer as the price was too low and Terex had so far failed to say what its plans for Demag Cranes were.
"Terex has not initiated any discussions with the Management Board or the Supervisory Board of Demag Cranes AG relating to the offer," Demag said.
"It is not possible at the current time to conclusively assess the strategic aims pursued in the offer or any other intentions of the bidder -- including with regard to locations and jobs."
Demag was put in play in October when Finnish group Konecranes (KCR1V.HE) made an approach. It has rebuffed approaches from both Terex and Konecranes.
This month, Terex took its cash offer directly to shareholders. While it said it would still welcome the opportunity to talk to the company, relations have remained frosty.
Shares in Demag, which makes industrial and harbor cranes and offers maintenance services, were up 0.3 percent at 45.685 euros at 1144 GMT, well above the offer price.
Terex said on Monday it had no plans to increase its bid, which runs through the end of June, despite pressure from major Demag shareholders including Cevian.
The offer by Terex, which is being advised by Goldman Sachs (GS.N) and Commerzbank (CBKG.DE), depends on shareholders tendering at least 51 percent of Demag's stock.
A Demag deal with Terex would create a company with annual revenue of about $5.8 billion and give the U.S. group added scale in Europe and emerging markets, especially in China.
Demag Cranes also raised its outlook for the financial year through the end of September, saying on Tuesday it now expected its annual revenue to come in at 1.06 billion euros this year, more than its previous outlook range of 1.02-1.05 billion euros.
That figure will reach about 1.7 billion euros by the financial year ending in September 2015, with an operating margin of more than 10 percent, on the back of demand from emerging markets, Demag Cranes said.
(Reporting by Maria Sheahan; Editing by Will Waterman)