ACS defends takeover bid for Hochtief
Spanish construction giant ACS Group Friday defended its takeover plan for Hochtief after reports that its German rival was unhappy with the bid.
"The intentions are quite friendly" and the deal will be "beneficial for both companies and their shareholders," ACS general manager Angel Garcia Altozano said in a conference call with analysts.
ACS, Spain's biggest construction group, announced in a statement to the Madrid stock market on Thursday that it planned to make an all-share takeover bid for Hochtief that would create a major world player in the industry.
The group, which is run by Florentino Perez who is also chairman of the Spanish football club Real Madrid, already owns just under 30 percent of Hochtief, and the remaining 70 percent stake would be worth about 2.73 billion euros (3.56 billion dollars).
But the bid values Hochtief at less than its current stock market level of 59.45 euros (78 dollars) per share at the close on Thursday, and was given a cool reception on the Frankfurt stock exchange.
Press reports in Germany Friday also said Hochtief iteself does not look kindly on the move.
The offer is "a provocation" for managers of the German group, a source close to the matter told the business daily Handelsblatt.
Hochtief has hired the Swiss bank Credit Suisse to provide advice regarding a defensive strategy, the newspaper added.
"Hochtief can get by very well without ACS," a source close to the company told the Financial Times Deutschland (FTD).
Hochtief has not yet reacted officially to ACS' offer to exchange eight of its own shares for every five owned by Hochtief shareholders, saying only that it will examine the proposal and give a recommendation "in due time."
Altozano said ACS has "a good relationship with (Hochtief's) management team and look forward to maintaining it."
He added that Hochtief shareholders should be glad that the deal would create "the first global construction and infrastructure group."
The two are already among the largest construction groups in the world, and Perez said Thursday the takeover would create "the No. 1 infrastructure group in the Western world," and give both companies "access to new geographic markets."
Under German takeover regulations, ACS is required to bid for the whole company once its stake exceeds 30 percent, and the German press has speculated that the group is not interested in acquiring 100 percent of Hochtief but just a little more than half.
In a later statement released on its website on Thursday, ACS said it initially "intends to increase its shareholding to just above 50 percent," which would allow for "financial consolidation" of Hochtief within ACS.
© 2010 AFP