German watchdog finds no problem with ACS bid for Hochtief

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German financial market watchdog BaFin said Wednesday that it had found no irregularities in an offer by the Spanish construction group ACS for Hochtief of Germany, following suspicions of collusion with a US investment fund.

An ACS takeover of Hochtief would create Europe's biggest construction company and the third biggest worldwide, and bolster the finances of the debt-laden Spanish group.

BaFin had looked into support for ACS from the US fund Southeastern Asset Management, which tendered half of its 4.84 percent stake in Hochtief to an ACS offer even though the offer was for less than Hochtief's stock market value at the time.

Southeastern already owned holdings in both ACS and Hochtief, which raised suspicion it might have acted in concert with the Spanish group.

ACS subsequently raised its public offer for Hochtief shares, and acquired a total stake of 31.59 percent in the German company,

Under German law it can then increase its holding up to 50 percent without making public announcements, opening the way for it to take a majority stake and become the third largest public works group worldwide.

"BaFin was unable to prove that there was concertation between ACS and Southeastern on the offer to Hochtief shareholders," the German watchdog said in a statement.

"ACS visibly did not violate any law during its (improved) offer of December 15 2010," it added.

ACS is run by Florentino Perez, the president of the Real Madrid football club.

ACS's global prospects and debt-laden balance sheet -- it had 9.08 billion euros ($13.3 billion) in net debt on September 30 last year -- would be strengthened by the acquisition of the financially more robust Hochtief.

Hochtief directors have tried several unsuccessful strategies to parry the ACS takeover bid.

© 2011 AFP

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