German Hochtief unveils huge India, Australia orders

2nd December 2010, Comments 0 comments

German construction group Hochtief, the target of a hostile takeover bid by Spain's ACS, said Thursday its Australian unit Leighton won two contracts worth 4.16 billion euros (5.5 billion dollars).

Leighton, 54.5-percent owned by Hochtief, is to set up a company that would dig a coal mine in India and run it for 22 years, with an expected production of 300 million tonnes of coal.

The contract is worth a total of 4.04 billion euros, with Leighton earning 3.64 billion.

In Australia, Leighton won a bid to run a coal mine for two years, a deal that is expected to earn the company 119 million euros.

This week, Hochtief suffered a serious setback in its attempt to ward off the takeover by ACS, which is already Hochtief's biggest shareholder.

The German financial markets watchdog approved the ACS bid, which was officially launched on Wednesday and runs until December 29.

The all-share ACS offer values Hoctief at less than what it is currently worth on the stock market, and the firm's management has said that it would not create value for its shareholders.

In recent weeks Hochtief has sought to drive its share price higher, notably with statements it was considering a spin-off of its infrastructure business, in order to ward off ACS.

Hochtief had also sought unsuccessfully to force ACS to make a bid for Leighton, a "poison pill" which would have make the purchase much more expensive.

It has attempted to persuade the German government to intervene as well.

© 2010 AFP

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