Terex formalises US$1.25bn approach on Demag

US-based Terex Corporation has officially announced that through its German subsidiary, Terex Industrial Holding AG, Dusseldorf, it has formally launched a voluntary public tender offer for Demag Cranes AG.


Offering €41.75 (US$61.96) per share, which values the company at €883.9m (US$1.25bn), Demag shareholders have until June 30, 2011 to tender their shares. The Terex offer is subject to a 51% acceptance threshold.


The offer price represents a premium of approximately 41% on the pre-takeover speculation share price of €29.65 (US$44) in October last year, and a premium of 15% on the closing price at the end of April, 2011 of €36.30 (US$53.87).


This latest move follows the hostile takeover bid by Terex directly to the German crane manufacturer’s shareholders for the outstanding share capital early this month after talks with its German competitor apparently failed.


Confirming the initial “unsolicited” approach by Terex at the time, Demag said that its board would continue to inform shareholders on all meaningful developments. As a result Demag’s share price rose above the offer price by 21% to €43.85 (US$65.25) as markets anticipated a bidding battle.


Prior to the formal bid yesterday (19 May) the company had not replied, prompting the Terex Chairman and CEO, Ronald DeFeo, to tell Bloomburg, “If [Demag] management can’t talk with us then I think their shareholders are going to have to make their own decision”. He said he had no plans to raise the offer and called on Demag executives to start talks with Terex.


Speculation of an acquisition first arose last September when Finland-based Konecranes confirmed that it had approached Demag to discuss a ‘potential combination of the two companies’. In reply, Demag said that the company had, “no interest in engaging in any dialogue regarding such a potential combination”.


Although at the time Konecranes said it would not pursue a hostile bid, there are current rumours that the company may be reviewing its position.
(Source:http://www.container-mag.com)