Unfriendly takeover
December 16, 2010
Spain's ACS has revised its offer for Hochtief, raising an earlier bid that Germany's biggest construction company advised shareholders to reject. Now Hochtief says it is open to talks with its Spanish rival.
The Spanish concern has been stalking Hochtief since September. Two weeks ago it made an official takeover bid that put the German group in a defensive crouch.
On Wednesday, ACS raised its share-swap offer to exchange nine ACS shares for every five Hochtief shares. Its previous bid offered a ratio of eight to five.
Hochtief categorically rejected the ACS bid made on December 1, saying it did not make sense from either a financial or strategic standpoint.
The initial takeover bid was worth around 2.7 billion euros ($3.6 billion). The new offer is 12.5 percent higher. It values each Hochtief share at 63.80 euros, which is two percent below the market price.
Defensive moves
Hochtief CEO Herbert Luetkestratkoetter had described that first bid as "decidedly unfriendly," but on Wednesday he said his company was prepared to enter fresh talks with the Spanish group.
Up to this point, Luetkestratkoetter has sought to ward off the takeover attempt, appealing to regulators for protection and entering into a capital-raising deal with Qatar, in an attempt to dilute ACS' stake in Hochtief.
That move make it harder for the Spaniards to get above the 30 percent threshold necessary to further Hochtief stocks on the open market.
ACS currently owns a 27.2 percent stake in Hochtief and has said its goal is a 50 percent controlling share.
ACS has said it is not interested in breaking up Hochtief and that it plans to keep the company's headquarters in the city of Essen.
But ACS I under no legal obligation to refrain from cuts should it gain control of the concern.
Hochtief's works council warned that a takeover could mean job losses, most of which would be felt in Germany. The company employs around 11,000 people. Union leaders say any change of ownership would put up to 15,000 jobs at supplying firm on the line as well.
Author: Kyle James (Reuters, AFP, dpa)
Editor: Sam Edmonds