Hochtief hopes Qatar stake will fend off ACS
German construction group Hochtief, fighting off a hostile bid from Spanish rival ACS, said on Monday that Qatar was acquiring a 9.1-percent stake in the firm following the issue of seven million new shares.
The deal with Qatar Holding will bring in around €400 million ($534 million), strengthening Hochtief's financial position, the German company said in a statement.
"In addition, it provides latitude for the announced further growth after the planned bond issue had to be called off in mid-September," chief executive Herbert Lütkestratkötter was quoted as saying.
But the move, which raises equity in Hochtief "under exclusion of subscription rights of existing stockholders," dilutes ACS' holding, currently almost 30 percent, opening a new chapter in the Spanish group's takeover bid.
ACS has offered eight of its shares for every five of Hochtief, a deal which Hochtief directors says undervalues the group, but which would create one of the world's biggest construction firms if completed. Among the German group's prized subsidiaries is the Australian construction firm Leighton.
Hochtief shareholders have until December 29 to accept the ACS offer.
In unveiling the deal with Qatar Holding, the investment arm of Qatar Investment Authority, Hochtief said it would transfer cutting-edge technology and know-how to the Gulf state, where it has already founded a joint venture to build an entirely new city, Lusail.
The city is designed for 200,000 residents and is expected to hold the World Cup Final in 2022, the statement said.
AFP/mry
Comments
See Also
The deal with Qatar Holding will bring in around €400 million ($534 million), strengthening Hochtief's financial position, the German company said in a statement.
"In addition, it provides latitude for the announced further growth after the planned bond issue had to be called off in mid-September," chief executive Herbert Lütkestratkötter was quoted as saying.
But the move, which raises equity in Hochtief "under exclusion of subscription rights of existing stockholders," dilutes ACS' holding, currently almost 30 percent, opening a new chapter in the Spanish group's takeover bid.
ACS has offered eight of its shares for every five of Hochtief, a deal which Hochtief directors says undervalues the group, but which would create one of the world's biggest construction firms if completed. Among the German group's prized subsidiaries is the Australian construction firm Leighton.
Hochtief shareholders have until December 29 to accept the ACS offer.
In unveiling the deal with Qatar Holding, the investment arm of Qatar Investment Authority, Hochtief said it would transfer cutting-edge technology and know-how to the Gulf state, where it has already founded a joint venture to build an entirely new city, Lusail.
The city is designed for 200,000 residents and is expected to hold the World Cup Final in 2022, the statement said.
AFP/mry
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.