Takeover bid

Spain's largest construction group ACS presented its offer for German rival Hochtief to Germany's financial supervisory authority Bafin on Thursday.

Bafin now has 15 days to rule on the takeover bid, and Hochtief shareholders then have a further four weeks to decide whether to accept the offer.

ACS, which already holds just under 30 percent of Hochtief, Germany's largest public works construction company, wants to take a controlling stake in the business. It is seeking an all-share swap to create what would become one of the world's leading construction firms.

However, ACS has offered a price below Hochtief's current market value of around 4.3 billion euros (5.9 billion dollars), which Hochtief sees as unfair.

Preventative strategies

Herbert Luetkestratkoetter, head of Hochtief, said the company considers the ACS bid to be hostile and is "definitely" planning further strategic action.

Hochtief's chief financial officer Burkard Lohr refused to rule out a capital increase or a convertible loan to refinance the company. Both measures would increase the number of Hochtief shares and thus make a takeover bid more difficult.

Another option is for Essen-based Hochtief to puts its subsidiary Concessions on the stock market, even if it means separating itself from that part of its business. Concessions' main activity is the operation of airports and toll-roads.

At the same time the German firm is trying to force the Spanish group to make a bid for Hochtief's Australian subsidiary Leighton, thereby increasing the price, and possibly discouraging ACS.

ACS could instead carry out a capital increase of 78.5 million euros (107.6 million dollars), which is to be approved during an extraordinary meeting of shareholders on November 19.

Author: Joanna Impey (AFP, dpa, Reuters)
Editor: Michael Lawton