FRANKFURT (Reuters) - Demag Cranes AG D9CGn.DE said it expected to recommend an offer by Terex Corp (TEX.N) after the U.S. construction machinery maker sweetened its bid and agreed to give its German rival autonomy after a deal.
Terex’s increased offer of 45.50 euros per share in cash values Demag — a maker of industrial cranes and port automation technology — at 963 million euros ($1.4 billion) compared with 883 million under the old offer.
“I think this is a good result,” Demag Chief Executive Aloysius Rauen told Reuters in an interview on Thursday.
Demag were trading 2.3 percent higher at 45.31 euros by 1224 GMT.
Rival crane maker Konecranes Abp KCR1V.HE, which had approached Demag last October with a view to striking a deal, declined comment.
The supervisory board of Demag Cranes unanimously endorsed the Terex offer in a sign that activist shareholder Cevian supports the deal, a source familiar with the situation said on Thursday.
Cevian, the biggest shareholder in Demag with a stake of just over 10 percent had rejected an earlier offer. Cevian declined to comment.
The new Demag offer comes amid signs that increased global manufacturing is fuelling demand for freight transportation. Shipping demand is set to grow by between 6 and 8 percent in 2011.
As part of the new offer, which is contingent on receiving 51 percent acceptance from shareholders, Terex has agreed to give Demag broad operational and strategic autonomy even after acquiring a majority stake in the company.
Demag said it expected to evaluate the new bid, which runs to June 30, by June 22.
“Pending this opinion, however, the management board of Demag Cranes AG is confident based on today’s business combination agreement that it will in total be able to recommend that the company’s shareholders accept the improved offer,” Demag said.
In late May, the company had rejected the 880 million euros bid from U.S. construction machinery maker Terex as too cheap and strategically opaque. [ID:nLDE74U168]
Additional reporting Arno Schuetze and Terhi Kinnunen; Editing by Mike Nesbit and David Holmes