Qatar helps Germany’s Hochtief in takeover battle
German construction group Hochtief, which is battling a takeover bid from Spanish shareholder ACS, appears to have found an ally in Qatar, which is set to buy a 9.1-percent stake in the German group.
The deal with Qatar Holding will bring in around 400 million euros (534 million dollars) in exchange for seven million new shares, strengthening Hochtief’s financial position, the German company said in a statement.
“In addition, it provides latitude for the announced further growth after the planned bond issue had to be called off in mid-September,” chief executive Herbert Luetkestratkoetter was quoted as saying.
The news cheered investors who drove up Hochtief shares more than three percent in morning trades on the Frankfurt stock exchange.
The capital increase dilutes ACS’ holding, currently almost 30 percent, opening a new chapter in the Spanish group’s months-long takeover bid.
ACS has offered eight of its shares for every five of Hochtief, a deal which Hochtief directors says undervalues the group, but which would create one of the world’s biggest construction firms if completed.
Among the German group’s lucrative holdings is a 54.5-percent stake in the Australian construction firm Leighton.
Hochtief shareholders have until December 29 to accept the ACS offer.
Qatar Holding said in a statement released Monday that it hoped to mediate between all Hochtief stakeholders, including ACS, for the benefit of the group. “Qatar Holding will seek to unite the strengths of Hochtief management, the major shareholders, including ACS and other stakeholders, to ensure a vibrant future for the company,” said Ahmad Mohamed al-Sayed, the managing director and chief executive officer of Qatar Holding.
“We seek to achieve, as a constructive mediator, a win-win outcome for all parties,” he added.
Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani, who is also the chairman of Qatar Holding, hailed the acquisition, saying it deepens links between Qatar and Germany.
“We are happy to be making this investment today in Hochtief, which will further enhance the deep relationship between Germany and Qatar and will facilitate the transfer of advanced technology and know-how to Qatar,” he said in the statement.
In unveiling the deal with Qatar Holding, the investment arm of Qatar Investment Authority (QIA), Hochtief said it would transfer cutting-edge technology and know-how to the Gulf state.
Hochtief has founded a joint venture there to build an entirely new city, Lusail, which has been designed for 200,000 inhabitants and is expected to hold the football World Cup in 2022, the statement said.
Hochtief currently has five subsidiaries in Qatar, and employs more than 5,000 people locally, it added.
Another large scale project there is the Barwa Commercial Avenue, a shopping district being built in the capital Doha in a deal worth around 1.3 billion euros.
Sayed said that Hochtief will locate its Middle East headquarters in Doha.
Qatar is active elsewhere in Germany also meanwhile, with a 17-percent stake in Volkswagen, Europe’s biggest auto manufacturer, and a holding of 10 percent in the luxury sports car maker Porsche.
“We will now be supporting each other in our development,” Luetkestratkoetter said.
In morning trade on the Frankfurt stock exchange, Hochtief shares leapt by 3.08 percent to 61.97 euros, while the MDax index on which they are listed gained 0.31 percent overall.