FRANKFURT Oct 23 More than 100 shareholders in
Demag Cranes including hedge fund Elliott
International are suing Terex for a higher payout after
its $1.4 billion takeover of the German crane maker, two people
familiar with the situation said.
Elliott and the other minority shareholders hope that Terex
will be forced to pay up an extra 200 million euros ($261
million) in the best case scenario, these people said on
German takeover law requires buyers who achieve a 75 percent
threshold to offer remaining shareholders compensation based on
a company valuation rather than the original offer price.
Terex made a takeover offer for Demag in May 2011 and after
sweetening its bid to 45.50 euros ($59.47) a share acquired 82
percent of Demag's shares by September 2011.
Judges deciding similar cases in Germany have tended to set
compensation at a level between the original offer and the
amount demanded by other shareholders.
Terex has offered remaining shareholders 45.52 euros a
share, while the activist investors are demanding more than 100
euros a share.
"The truth usually lies somewhere in the middle", one of the
A spokesman for the District Court Duesseldorf - the city
where Demag is also based - said that a complaint has been filed
by Demag investors, declining to elaborate.
A Terex spokesman said that the company understood
shareholders' rights to petition for a different valuation.
"But we are comfortable that our offer reflects a fair value
for the shares," he added.
Investors have sometimes been successful in their push for a
higher compensation. This year, courts upped the payment to
minority shareholders of utility Mainova by 41 percent
and to investors in HVB Real Estate Bank by 22
According to the sources close to the matter, Elliott argues
that after the takeover by Terex and following several
management changes, Demag reduced its growth plans and came up
with an artificially low company value.
Elliott, which currently holds 12.7 percent in Demag Cranes'
shares making it the only shareholder with a stake of more than
3 percent besides Terex, declined to comment, as did Demag