Hochtief dismisses Leighton leadership

Hochtief has installed its CEO, Marcelino Fernández Verdes as CEO of Leighton Holdings, the Australian contractor in which it has a controlling interest. The move comes following Hochtief’s offer to increase its stake from 58.77% to 73.82% at a cost of some US$ 1.09 billion.

Leighton’s current CEO, Hamish Tyrwhitt and CFO Peter Gregg have had their employment terminated, and they will each receive a year’s pay in lieu of notice.

Leighton chairman Robert Humphris said, “Hamish and Peter have both been outstanding leaders of our business, having successfully brought Leighton through a period of stabilisation and set the company on a pathway to growth by substantially rebasing our operations. The Board and I sincerely thank them both for their contribution.”

In addition to Mr Fernández, two further Hochtief-nominated directors, Pedro Lopez Jimenez and Jose Luis del Valle Perez, have been appointed to the Leighton Board. Other Hochtief appointments are expected to come as the company increases its stake.

Hochtief has also increased its offer for Leighton shares by some 1.6%, to AU$ 22.50 (US$ 20.45) per share, from the original AU$ 22.15 (US$ 20.14) per share. This is being offered for three out of every eight shares held by independent owners of Leighton, and the total value of the offer is put at AU$ 1.21 billion (US$ 1.09 billion).

A statement from Leighton said that the company’s independent directors had pushed Hochtief to make an offer for all outstanding shares in the company. Although Hochtief declined to do so, the independent directors have recommended the improved offer to minority shareholders.

Mr Humphris said, “In difficult circumstances, the independent directors have secured an improved offer which we believe is the best outcome for Leighton’s shareholders and employees. Given the voting rights held by Hochtief and its stated intentions, the independent directors recognised that control of the Board and management would pass to Hochtief at the AGM.”