US CONSTRUCTION machinery maker Terex yesterday made a hostile $1.31bn (£785m) bid for Demag Cranes, as the German company’s shares rose above the offer price on expectations of a bidding war.
Terex took its offer directly to shareholders after talks with Demag failed to secure a deal. Terex said it would pay €41.75 (£37.20) per share in cash, valuing its bid at €884m.
The offer is at a 15 per cent premium to Demag’s closing price on Friday. The company’s shares rose 24 per cent to €45 yesterday, while Terex dipped two per cent to $34.09.
Analysts said the Terex offer was probably too low.
“It is likely that Terex will have to increase the offer price in order to be successful,” DZ Bank analyst Karsten Oblinger said.
Konecranes declined to comment. In October, it expressed interest in merging with Demag but was rebuffed. It later ruled out a hostile approach.
Terex and Demag have not talked since September, said a person with direct knowledge of the talks. The source requested anonymity because the discussions were confidential.
Demag confirmed receiving an “unsolicited” offer from Terex and said it would update shareholders of any meaningful developments.
Buying the German company would give Terex added scale in Europe and emerging markets, especially in China.