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Heidelberg CEO says mergers too risky for banks

Source: Reuters - Wed 14th Oct 2009

German printing press maker Heidelberg's chief executive said banks would not support additional risks that any potential cooperation or merger would entail but declined to comment on talks with Man Roland.

Three sources familiar with the matter told Reuters on Monday that Man Roland, the world's No.2 printing press maker, called off merger talks with Heidelberg due to a surprise profit warning from the larger rival.

Asked to explain why talks broke down, Bernhard Schreiertold Frankfurter Allgemeine Zeitung in comments from an interview to be published on Wednesday: "Let me say it this way. I was very suprised about reports in the media."

He said he would not comment on speculation and added that the company had "pretty much reiterated that quarterly revenue would be 500 milion euros ($741.2 million) and that recovery would, in our view, still take a while."

Man Roland as well as Man Roland's majority owner Allianz and minority partner MAN none of whomever officially confirmed the talks have declined to comment.

Heidelberg said in a regulatory filing after the market close on Friday that preliminary results for its second quarter to the end of September showed no signs of the usual seasonal upswing from the typically weak first three months.

As a result, management forecast its operating loss for its 2009-2010 fiscal year could as much as triple on the previous year to 150 million euros.

"We have generated a positive free cash flow in the second quarter and will be clearly better positioned in the full year than in the previous year" Schreier said.

"I am confident we are seeing the bottom with 500 million euros in the quarter. Heidelberg Druck will once again make more than 3 billion euros in sales, once the economy picks up, "Schreier added.

Asked if job cuts announced in March and the size of planned cutbacks were sufficient, Schreier said that "if quarterly salesof 500 million euros were to continue, the measures would not be enough".