Powerscreen shares have risen, gaining 5p sterling to 170p (€2.56) yesterday, following weekend reports that the Terex Corporation was expected to bid £170 million for the company.

US-based Terex manufactures heavy machinery and also has operations in the Republic. It is the third company to be linked to Powerscreen as possible buyers of the Dungannon engineering group.

At the end of March, Powerscreen said it was in talks which might lead to an offer being made for the company. The company is valued at around £200 million sterling.

Others mooted to be interested include John Deere, a US tractor manufacturer which has already bought some of Powerscreen's assets, and another US firm, Caterpillar.

Terex, which is based in Connecticut, is quoted on the US stock exchange. It has a heavy machinery business at Little Island, in Cork, which was established in 1997 and employs 75 people.

Terex already buys some of Powerscreen's mobile crushing equipment and is familiar with its product lines, according to sources. Analysts said the fit would make sense. A spokesman for Power screen said the company could neither confirm nor deny the reports as the company was in a closed period.

Mr Rory Gillen, an analyst with ABN Amro, said he doubted anything would emerge until the company produced its first set of full-year results since it emerged last year that the company had uncovered accounting irregularities in Matbro, a subsidiary.

This resulted in two profit warnings and a projected £10 million profit turning into a £47.3 million loss.

The results, due in two weeks, are expected to show pre-tax profits of around £20 million.

In the past year the company has been disposing of non-core assets, which have raised up to £60 million. The company is now seen as ripe for a takeover, including a possible management buyout.