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Terex Corp. (TEX) Chairman and Chief Executive Ron DeFeo said Monday he has no plans to raise his offer for German crane manufacturer Demag Cranes AG (D9C.XE) and again called on Demag executives to engage in talks with Terex.
Terex offered EUR41.75 a share offer for Demag on May 2. DeFeo said Demag executives have yet to respond to the U.S. company's tender offer for Demag shares and have given no indication what Terex would have to pay to acquire Demag.
"We don't know exactly why," DeFeo said during a presentation to analysts in New York City. "We want a friendly deal. We think the value of what we put on the table is fair and full. It's in [Demag] shareholders' interest that they engage in a discussion."
Demag's stock price has moved well above EUR41.75 since the tender offer was announced, indicating that investors believe the company is worth more than Terex is offering. In trading Monday, Demag closed up 0.64% at EUR47.49.
Demag shareholder Cevian Capital said last week Terex's offer was "completely inadequate" and did not reflect the potential value of Demag.
DeFeo said Terex won't participate in a bidding war for Demag, noting that Connecticut-based Terex would have difficulty gaining a return on its investment at a higher purchase price.
"Our view on price is disciplined because we're return-on-capital driven," he said.
Terex manufacturers tower cranes, truck mounted cranes, rock crushing equipment and self-propelled work platforms for working in high places. Terex has been looking to expand into different equipment markets to offset the cyclical slumps in its business lines. Demag makes cranes and hoists used in factories and warehouses, as well as port cranes for maritime shipping. DeFeo said if Terex is unable to obtain Demag, it will re-evaluate options for using its cash, including making smaller acquisitions and the retiring high-yield debt.
Terex stock closed Monday's regular trading session down 4% at $30.04 a share. The stock was up 0.60% in after-hours trading at $30.22.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; firstname.lastname@example.org
(Neetha Mahadevan and Eyk Henning contributed to this report.)