Demag Shareholder Dismisses Terex Bid

Just as Demag management was mulling over the proposed buyout offer from Terex Corp. for 884 million euros ($1.3 billion), the crane maker’s biggest shareholder, Cevian, labeled the deal as grossly inadequate.

Cevian cited that ever since the bid was announced on May 2, 2011, Demag shares have traded above the bid per share of 41.75 euros. Cevian’s remonstrance has created pressure on Terex to sweeten its offer price.

The Swedish investor, Cevian’s stake of just over 10% in Demag was acquired in May last year. In October, Cevian gained a seat on the board of Demag. Cevian takes significant stakes in a limited number of publicly listed companies and holds the stakes for a span of three to five years.

In a statement to the press Cevian said that it “pursues a strategy of industrial value enhancement and is convinced of the innovation and technological leadership of the Demag Cranes Group and believes in the continued success of its strong Demag and Gottwald brands.”

It adds that the current valuation does not reflect the actual fundamental value of Demag Cranes.

Jens Tischendorf, a partner at Cevian Capital responsible for the business in Germany added: “The Management of Demag Cranes responded quickly and resolutely to the economic and financial crisis, laying the foundations for strengthening the competitiveness of the Company. We are convinced that the management board is following the right path.”

Westport, Connecticut-based Terex Corporation is a global manufacturer of a broad range of equipment for the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.

The company’s manufacturing facilities are located in the U.S., Canada, Europe, Australia, Asia and South America. It operates through four business segments: Aerial Work Platforms, Construction, Cranes and Materials Processing.

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