EXCLUSIVE-UPDATE 2-Gardner Denver-SPX talks end, no deal-source

Fri Dec 21, 2012 5:06pm EST
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* SPX, Gardner Denver had doubts on deal's success-source

* Private equity firms invited to meet Gardner Denver-source

* Gardner Denver shares down 10.8 pct, SPX shares up 1.1 pct (Adds Gardner Denver statement, background, updates shares)

By Greg Roumeliotis

NEW YORK, Dec 21 (Reuters) - Industrial machinery maker Gardner Denver Inc has ended talks with SPX Corp and has invited the private equity firms that had made offers for the company to re-engage in a sale process, a source familiar with the matter said on Friday.

Gardner Denver shunned private equity firms abruptly earlier this month when it entered into exclusive talks to be bought by SPX, which offered to pay more based on the synergies it thought it could extract from the Wayne, Pennsylvania-based company, people familiar with the matter had told Reuters.

Gardner Denver shares tumbled on the news, ending trading on Friday down 10.8 percent at $67.40 and giving the company a market value of about $3.3 billion. SPX shares were up 1.1 percent at $65.79.

Talks between SPX and Gardner Denver ended after doubts emerged on both sides about the deal's success, the source said. Private equity firms have now been asked to meet with Gardner Denver management in early January, the source added, speaking on condition of anonymity because the discussions are confidential.

SPX's management came under increasing pressure this week from some of its shareholders, who questioned the rationale of a deal and the price offered to Gardner Denver, another source familiar with the matter said.   Continued...