Terex, Demag--Terex to decide by Friday on Demag approach-sources

FRANKFURT Oct 12 (Reuters) - U.S. crane maker Terex (TEX.N) will decide by Friday whether to approach German rival Demag Cranes (D9CGn.DE) for possible takeover talks, several people familiar with the matter said.

The company has asked Goldman Sachs (GS.N) to evaluate possible next steps, the people told Reuters on Tuesday.

German daily Financial Times Deutschland earlier reported that Terex was considering a bid for Demag, which last week said it had rejected an approach by Finnish rival Konecranes (KCR1V.HE), saying it was not interested in pursuing talks.

One person said Terex was mulling taking a stake of less than 30 percent of Demag rather than launching a full takeover.

"A hostile move is not really on Terex's agenda," the person said.

All of the parties declined to comment.

Demag's shares have jumped almost 24 percent over the past five days, boosting the company's market value to 790 million euros ($1.1 billion), and some have said share price rises could make potential bidders shy away from pursuing further talks.

This is the second major test for Demag Chief Executive Aloysius Rauen, who stepped in to take the helm at the height of the global economic crisis in May 2009.

Rauen, an engineer by training, spent years in the aerospace industry, working his way up from heading the Tornado fighter jet project at MBB to becoming head of the Eurofighter programme at European aerospace and defence company EADS.

He responded to the crisis by restructuring and cutting jobs at Demag. The company has said it expected sales for the full year that ended on Sept. 30 to have slumped to 900 million euros from 1.05 billion euros a year earlier.

Konecranes last week urged smaller German rival Demag to reconsider its rejection of consolidation talks, saying a merger would be highly beneficial to the two crane makers.

A merger of Konecranes and Demag, leading makers of cranes used to load and unload goods in shipping ports, would create a crane-maker with about 15,000 workers and annual sales of 2.6 billion euros. (Reporting by Philipp Halstrick; Writing by Maria Sheahan; Editing by Mike Nesbit)

Source: Reuters