ACS wins another round

By Sandy Guthrie27 January 2011

Hochtief's accusations that Actividades de Construccion y Servicios (ACS) colluded with a majority shareholder in its attempt to take over the German company have been rejected by German regulators in what could be seen as the final blow to Hochtief's defence against the unwelcome approach.

Hochtief had approached German financial regulator BaFin over concerns that ACS colluded with Southeastern Asset Management in order to secure a substantial slice of Hochtief shares.

Southeastern's 16 December decision to boost ACS's takeover bid for the German contractor by pledging to hand over half of its total 5% holding in Hochtief is likely to have been crucial in ACS's drive to build the desired 30% stake in the company.

BaFin rules state that with more than 30%, the Spanish contractor can now keep buying shares on the open market to secure a majority holding of over 50% without having to make a mandatory bid for the whole of the company.

In an attempt to scupper ACS's takeover approach, Hochtief CFO Burkhard Lohr said in an interview in the German press that he expected BaFin to declare the ACS bid void as a result of the alleged collusion.

Southeastern Asset Management owns stakes in both Hochtief and ACS.

Now, BaFin has said that it has not found any evidence that Southeastern and ACS acted in concert in the takeover offer by ACS made to the shareholders of Hochtief.

BaFin said that in the course of its examination, it had not found any indications of oral or written agreements, or of any other concerted action regarding the joint acquisition of shares of Hochtief. BaFin also said it had not found that the two companies had made any arrangements to pool their voting rights.

In addition, BaFin said that ACS, in submitting its amended offer document of 15 December, 2010, had not obviously contravened any provisions under takeover law and that the amendment was therefore admissible.

After the extended acceptance period for the all-share offer expired on 18 January, ACS said it had reached a 31,59% stake in Hochtief. ACS offered nine of its shares for every five in Hochtief.

An ACS spokesperson has said the final outcome of the offer can be expected on 3 February, and in the meantime the pledged shares could still be bought back and traded elsewhere.

The approach has been consistently resisted by Hochtief's management board, which rejected both ACS's initial bid and the second, sweetened offer.

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