Oct. 8 (Bloomberg) -- Demag Cranes AG, the world’s largest maker of harbor cranes, rose to the highest in more than two years in Frankfurt trading after Finnish competitor Konecranes Oyj said it approached the company about a possible merger.
Demag gained 5.86 euros, or 19 percent, to 37.35 euros, the highest price since Sept. 2, 2008, as of the 5:30 p.m. close of trading. The stock has gained 60 percent this year, valuing the manufacturer at 791 million euros ($1.1 billion).
Konecranes, the world’s biggest maker of industrial cranes, contacted Demag on Sept. 8 about a “potential combination” that was rejected, the Hyvinkaa-based company said today in a stock exchange statement. The Finnish manufacturer said the European crane industry needs consolidation and that links with Demag would follow a “convincing logic.”
The companies haven’t held talks and there is “no certainty that any transaction will materialize,” it said.
Demag, which has its headquarters in Dusseldorf, Germany, said in a separate statement that after a “highly preliminary” approach from unidentified foreign parties, management decided to stick to a stand-alone strategy as further talks wouldn’t be in the interest of shareholders or the company.
The German company “seems to think it’s strong enough and doesn’t need a partner,” said Michael Broeker, an analyst at Steubing AG in Frankfurt with a “buy” recommendation on the shares. “I don’t think there’ll be any aftermath and both companies will go back to business as usual.”
The German company first sold stock to the public in 2006. The manufacturers has no controlling shareholder.
Konecranes fell 23 cents, or 0.9 percent, to 26.32 euros in Helsinki. The shares have risen 38 percent this year.
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