UPDATE 3-Konecranes says has no plans for hostile Demag bid

* Konecranes says interested in constructive dialogue

* Demag share price pares gains, up 0.7 percent

* Activist investor gains seat as management receives offers

* Cevian says indications of interest show Demag attractive

* Management prefers standalone future to Terex, Konecranes

(Adds Cevian statement, investor comment)

FRANKFURT, Oct 22 (BestGrowthStock) – Finland-based crane maker
Konecranes (KCR1V.HE: ) said it would not make a hostile approach
for Demag Cranes (D9CGn.DE: ) 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 0.7
percent to 36.15 euros at 1504 GMT, after reaching a session
high of 37.67 euros.

The shares have gained a third in value since Konecranes
said earlier this month 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 (TEX.N: ) to
launch hostile bids, sources have told Reuters. [ID:nLDE69E1W9]

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.
[ID:nWEA1609] [ID:nLDE64K0HR]

In May, Cevian said it had built up a stake of more than 10
percent in Demag. [ID:nLDE64K0HR]

Cevian’s Germany chief, Jens Tischendorf, who has been
appointed to the Demag board, said the recent unbinding
indications of interest showed the attractiveness of Demag.

Cevian supports Demag management in trying to increase the
fundamental value of the company, Demag said in a statement.

“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

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. [ID:nN21112558]

Record trading volumes in Demag shares signal heightened
hedge fund buying as a prelude to a possible battle for control.

Another short-term oriented investor who recently built up a
Demag stake told Reuters on Friday that he will shortly approach
management to urge it to consider options to create value for
shareholders. The investor declined to be named.

(Reporting by Arno Schuetze and Edward Taylor in Frankfurt
and by Anneli Palmen in Duesseldorf; Editing by David Cowell)

UPDATE 3-Konecranes says has no plans for hostile Demag bid