Terex Says ‘Overlaps’ Hinder Rival Bidders for Demag Cranes

Terex Corp. (TEX) Chief Executive Officer Ron DeFeo said the heavy-equipment maker doesn’t expect competition in its 883.9 million-euro ($1.25 billion) bid for Germany’s Demag Cranes AG (D9C) because potential suitors would face “significant overlaps.”

“All bidders in my opinion have an issue or two, whether that’s regulator risk or cultural issues,” DeFeo said today in an interview in New York, where Westport, Connecticut-based Terex was holding a presentation for investors.

“Each one of the competitors has significant overlaps where we don’t,” he said. “Overlaps mean either jobs get lost or regulator risk.”

Terex, which makes construction cranes, on May 2 offered 41.75 a share for Dusseldorf-based Demag to expand into harbor cranes. Demag has traded above the bid price since then, closing at 47.50 euros today in Frankfurt trading.

“The price that their equity is trading at is assuming that there will be a competing bid and a competitive bid process,” DeFeo said. “I think that’s a bad assumption but it’s an assumption that only time will determine.”

Demag hasn’t responded to Terex’s offer, DeFeo said.

“If management can’t talk with us then I think their shareholders are going to have to make their own decision,” he said.

Terex fell $1.26, or 4 percent, to $30.04 as of 4:15 p.m. in New York Stock Exchange composite trading.

Terex’s offer for Demag is the largest takeover involving a material-handling company announced in the past 10 years, according to data on 115 bids compiled by Bloomberg.

To contact the reporter responsible for this story: Sonja Elmquist at Selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.

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