Terex today acknowledged that it has received a revised non-binding proposal from Zoomlion Heavy Industry Science and Technology to acquire all outstanding shares of Terex for $31 per share in cash, as was reported last week. The proposal is conditioned upon, among other things, receipt of U.S. and Chinese regulatory approval and Zoomlion shareholder approval.
Terex’s board of directors, in consultation with legal and financial advisors, has determined to pursue negotiations of definitive terms with Zoomlion to ascertain whether it can obtain a binding proposal from Zoomlion that provides for a high degree of closing certainty.
Terex said, in a statement, that there can be no assurance that a satisfactory proposal can be achieved. Its board still has not changed its recommendation in support of the company’s proposed merger with Finland’s Konecranes, and Terex is prohibited from entering into an agreement with Zoomlion until Terex’s existing agreement with Konecranes is terminated. Terex may not terminate its existing agreement unless and until Terex shareholders vote upon, and fail to approve, the Konecranes transaction, or Terex is otherwise entitled to terminate under its agreement with Konecranes.
A potential Zoomlion-Terex deal could still be blocked by the Committee on Foreign Investment in the United States, which is likely to scrutinize any potential acquisition of a U.S. company by a Chinese firm. People close to the situation have mentioned that Terex’s U.S. government-related contracts and contracts in U.S. ports could inspire CFIUS attention, although some analysts believe these contracts are not significant enough to block a deal.
Terex share rose in after-hours trading today.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.