U.S. hedge fund Elliott gets right to take stake in Germany's DMG

By Reuters

Jan 31, 2015 09:41 AM EST

U.S. hedge fund Elliott has obtained the right to take a stake in German machine-tool maker DMG Mori Seiki AG (GILG.DE), for which Japanese partner DMG Mori Seiki Co Ltd (6141.T) made a takeover offer last week, the German company said on Friday.

Elliott used share purchase agreements to gain the right to own a 5.55 percent stake in DMG, the German company said. The hedge fund does not directly own shares in DMG.

The 5 percent threshold was crossed on Jan. 22, DMG said.

Under German law, investors must disclose when their holding in a company breaches certain thresholds, the lowest being 3 percent.

Japan's DMG Mori Seiki last week offered 27.50 euros ($31) in cash for each outstanding share in DMG, valuing the company at nearly 2.2 billion euros, DMG Mori Seiki AG Chief Executive Ruediger Kapitza told Reuters.

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