FRANKFURT, Oct 22 (Reuters) - Finland-based crane maker Konecranes said it would not make a hostile approach for Demag Cranes as it seeks to merge with its German rival, Chief Executive Pekka Lundmark said on Friday.
Shares in Demag, which has said it wants to stay independent, pared gains on Lundmark's remarks and were up 0.5 percent to 36.08 euros at 1200 GMT, after reaching a session high of 37.67 euros.
The shares have gained a third in value since Konecranes said last week it was interested in a merger.
But the high price has made it unattractive for Konecranes as well as reported suitor and U.S.-based rival Terex to launch hostile bids, sources have told Reuters.
Meanwhile, activist investor Cevian clinched a seat on the Demag board in a move which analysts said could weaken its management's ability to defend a standalone strategy.
In May, Cevian said it had built up a stake of just over 10 percent in Demag.
Cevian's Germany chief, Jens Tischendorf, has been appointed to the Demag board, Judge Alexander Glomb from the Duesseldorf regional court told Reuters on Friday.
'We are not planning a hostile approach to Demag Cranes and continue to be open and interested in a constructive dialogue with management regarding a possible combination of our two companies,' Lundmark told Reuters in an emailed statement on Friday.
On Thursday Terex said it was willing to use most of a $1.35 billion cash pile to pay for the right acquisition in the heavy equipment business, but declined to comment on Demag specifically.
Record trading volumes in Demag Cranes shares signal heightened hedge fund buying as a prelude to a possible battle for control.
Cevian -- which was not available for comment -- has been active in the industrial sector, and is also the third-largest shareholder in truckmaker Volvo.
(Reporting by Arno Schuetze and Edward Taylor in Frankfurt and by Anneli Palmen in Duesseldorf; Editing by David Cowell) Keywords: DEMAG/CEVIAN (edward.taylor@thomsonreuters.com; edward.taylor.thomsonreuters.com@reuters.net; +49 69 7565 1187) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Shares in Demag, which has said it wants to stay independent, pared gains on Lundmark's remarks and were up 0.5 percent to 36.08 euros at 1200 GMT, after reaching a session high of 37.67 euros.
The shares have gained a third in value since Konecranes said last week it was interested in a merger.
But the high price has made it unattractive for Konecranes as well as reported suitor and U.S.-based rival Terex to launch hostile bids, sources have told Reuters.
Meanwhile, activist investor Cevian clinched a seat on the Demag board in a move which analysts said could weaken its management's ability to defend a standalone strategy.
In May, Cevian said it had built up a stake of just over 10 percent in Demag.
Cevian's Germany chief, Jens Tischendorf, has been appointed to the Demag board, Judge Alexander Glomb from the Duesseldorf regional court told Reuters on Friday.
'We are not planning a hostile approach to Demag Cranes and continue to be open and interested in a constructive dialogue with management regarding a possible combination of our two companies,' Lundmark told Reuters in an emailed statement on Friday.
On Thursday Terex said it was willing to use most of a $1.35 billion cash pile to pay for the right acquisition in the heavy equipment business, but declined to comment on Demag specifically.
Record trading volumes in Demag Cranes shares signal heightened hedge fund buying as a prelude to a possible battle for control.
Cevian -- which was not available for comment -- has been active in the industrial sector, and is also the third-largest shareholder in truckmaker Volvo.
(Reporting by Arno Schuetze and Edward Taylor in Frankfurt and by Anneli Palmen in Duesseldorf; Editing by David Cowell) Keywords: DEMAG/CEVIAN (edward.taylor@thomsonreuters.com; edward.taylor.thomsonreuters.com@reuters.net; +49 69 7565 1187) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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