After months of sparring, Spanish infrastructure group ACS has struck the decisive blow in its battle to take over Hochtief by acquiring more than 30 percent of the German construction firm.
ACS announced this morning that it has amassed a 30.34 percent stake in Hochtief, crossing the 30 percent threshold that, under German law, will allow it to pursue a controlling stake in Hochtief on the open market. In all, 3.09 percent of Hochtief’s shareholders had sold their stakes to ACS by December 29. ACS is now extending its takeover offer until January 18.
Once it owns more than 50 percent of Hochtief, ACS can consolidate the company in its books, helping it to cut debt and use the German firm’s international presence to offset its exposure to the troubled Spanish market, from which it derives most of its sales.
The decisive push for ACS came after Hochtief shareholder Southeastern Asset Management announced it would tender roughly two million shares to the Spanish firm after the latter sweetened its takeover offer for Hochtief. ACS was originally offering eight of its own shares for five Hochtief shares but increased its offer to nine shares for every five. This values Hochtief at €4.9 billion.
Southeastern’s decision came after Hochtief sold a 9.1 percent stake in itself to Qatar Holding, an investment vehicle of the emirate of Qatar, at a price Southeastern termed a “give away”. This led it to call for the resignation of Hochtief’s leadership and, subsequently, to tender about half of its shareholding in the German company to ACS.
While Hochtief never explicitly made the connection, the sale to Qatar also diluted ACS’ original 29.9 percent holding in the company to 27.25 percent, making its takeover of Hochtief harder and more expensive.
Hochtief tried its best to fend off the takeover, which it always said was financially inadequate. Prior to the Qatar sale, it had appealed unsuccessfully to Australian regulators to force ACS to also acquire Hochtief’s Australian subsidiary, Leighton Holdings, valued at about €7 billion, in a bid to make ACS’ takeover bid prohibitively expensive.
ACS now expects the takeover process to be completed by early February.