Hedge fund Elliott not seeking board seat at DMG Mori Seiki AG (updated)

DMG MORI

28/04/2015 15:06

* Net income rises 8 pct, order intake down 2 pct 
    * Elliott sees itself as long-term investor - source 
    * Shares up 1.5 pct vs 1.3 weaker market 
 
 (Recasts, adds CEO quote, source on Elliott, share price) 
    FRANKFURT, April 28 (Reuters) - Hedge fund Elliott, which 
holds a 15 percent stake in German machine-tool maker DMG Mori 
Seiki AG, is not seeking a seat on the supervisory board, DMG 
said on Tuesday, contrasting with the activist fund's strategy 
for some of its other investments.  
    However, Elliott would probably make a suggestion if asked 
to nominate a board member, a person familiar with the hedge 
fund's thinking said.  
    Japan's DMG Mori Seiki Co Ltd  6141.T  has recently acquired 
a 52.5 percent stake in DMG Mori Seiki AG, and Elliott built its 
stake during the tender offer process. 
    According to the person familiar with its thinking, Elliott 
considers itself a long-term investor, with a view to keeping 
its stake for a period of say 3-5 years. 
    Unlike previous instances when Elliott has fought management 
decisions, such as its investment in Britain's Alliance Trust 
 ATST.L , the fund is backing the strategy of DMG Mori Seiki Co 
Ltd, the person said.  ID:nL8N0XP0YK   
    It is aiming to benefit from expected gains following the 
tie-up of the businesses of the two groups. It will, however, 
carefully monitor the situation and would act to prevent the 
Japanese group from taking value away from its German 
investment, the person added.    
    DMG Mori Seiki AG, formerly known as Gildemeister, said on 
Tuesday its first-quarter net income rose to 19.5 million euros 
($21 million), above the 16.4 million euro average estimate in a 
Reuters poll of analysts.  ID:nL8N0XO3LP  
    Order intake declined 2 percent to 587.2 million euros as 
some customers postponed orders. 
    "For the second quarter, we plan with an order intake above 
the level of the previous year. We expect important impulses 
from the trade fairs in Asia," DMG Chief Executive Ruediger 
Kapitza said. 
    For the full year, DMG Mori Seiki AG expects stable sales of 
2.25 billion euros and a decline of earnings before interest and 
tax to 165 from 183 million euros as price pressure, currency 
headwinds and the crisis in Eastern Europe eat into profits. 
    ($1 = 0.9189 euros) 
 
 (Reporting by Arno Schuetze, Ludwig Burger and Anneli Palmen; 
Editing by Mark Potter) 
 ((arno.schuetze@thomsonreuters.com; +49.69.7565.1197; Reuters 
Messaging: arno.schuetze.reuters.com@reuters.net)) 
 
Keywords: DMG MORI RESULTS/