ACS and Qatar raise Hochtief stakes
By Helen Wright28 March 2011
Spanish contractor Actividades de Construccion y Servicios (ACS) has raised its shareholding in its German takeover target Hochtief to 39%, while the second-largest shareholder in the company, Qatar Holding, also grew its stake to above 10%.
The moves came after Hochtief reported solid 2010 results, including a +50,3% increase in net profit to € 288 million and a +34% year-on-year order backlog increase to € 47,5 billion. The German contractor also issued a confident three-year forecast, expecting € 600 million net profit for 2011, € 500 million net profit for 2012 and € 450 million net profit for 2013.
But after the results were released on 23 March, state-owned investment vehicle Qatar Holdings moved to strengthen its hold on Hochtief further - action that has made ACS's path to the takeover of the company less clear-cut.
Qatar Holding LLC took a 9,1% stake in Hochtief in December last year through the purchase of 7 million shares that Hochtief issued to it directly. This decision met with controversy as shareholders were not given subscription rights to the new stock, and the move was widely seen as an attempt to block ACS's hostile takeover of Hochtief. By issuing the new shares to Qatar, Hochtief diluted ACS' shareholding and made its battle to secure a majority stake more expensive.
Now, Qatar Holding owns "above 10%" in Hochtief, reducing the free float that ACS is targeting in order to increase its shareholding to over the 50% change of control threshold in the company. At the same time, ACS increased its stake to 39% from around 34% and re-affirmed its intention to take over the company by mid-year.