Germany-based Demag Cranes has recommended that its shareholders should not accept the voluntary public tender offer from Terex for all its outstanding shares.

The offer in May by Terex Industrial Holding, a subsidiary of Terex Corporation, stood at €41.75 in cash, which represents a premium of 41% to the pre-takeover speculation share price on 6 October, 2010, said Terex.

The management board and supervisory board of Demag Cranes AG said it regarded the offer as inadequate from a financial point of view. It added that strong rates of revenue growth were forecast in the next two financial years.

Revenue in the ongoing financial year will reach about €1.06 billion (US$1.5 billion), up from a previous target of €1.02 to 1.05 billion ($1.47 to 1.51 billion), said the company. By no later than 2012/2013, group revenue is forecast to grow to €1.3 billion ($1.9 billion), exceeding record levels reached in 2007/2008 of €1.226 billion ($1.8 billion).

There are plans for new emerging market product families, added the company, to deliver a revenue jump in the 2014/2015 financial year to about €1.7 billion ($2.5 billion).

"It is not possible at the current time to conclusively assess the strategic aims pursued in the offer or any other intentions of the bidder, including with regard to locations and jobs, especially in light of the fact that Terex has not initiated any discussions with the management board or the supervisory board of Demag Cranes AG relating to the offer until the date of this statement," said a company spokesman.

Demag's business is highly complementary to that of Terex, said Terex in its offer statement, and the combination had a compelling industrial logic. The combined entity would have had total revenues of about $5.8 billion in 2010, with a strong footprint in Europe and emerging markets, especially in China.

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