Spanish construction firm ACS launches all-share takeover bid for Germany’s Hochtief

Spain’s ACS launches bid for Hochtief

MADRID — Spanish construction and services giant ACS said Thursday it has launched an all-share takeover bid for Germany’s largest builder, Hochtief AG, in which it already holds a nearly 30 percent stake.

ACS announced in a filing with Spanish regulators it will offer eight ACS shares for every five of Hochtief. It said this is based on the average share price of the two firms over the past three months.

Spanish media say this means ACS values the 70 percent chunk of Hochtief it wants to acquire at about euro2.7 billion ($3.51 billion). ACS, which is run by football team Real Madrid’s president Florentino Perez, is already the largest shareholder in Hochtief.

ACS shares, which were earlier suspended for trading pending the bid announcement, were up 4.80 percent at euro36.47 in midafternoon.

Hochtief’s interests outside Germany include U.S. subsidiary Turner Construction Co. and a majority holding in Australia’s Leighton Group.

ACS, traditionally associated with large public works projects, diversified in recent years as Spain’s economy weakened, buying stakes in electrical utility Iberdrola and toll road operator Abertis.

Juan Jose Figares of Madrid-based Link Securities said the acquisition would make sense for ACS.

“For ACS, the takeover could reduce its exposure to the weakened domestic market and could create a solid financial structure,” he said in a statement.

There was no immediate comment from Hochtief on the offer. Hochtief shares climbed sharply following the offer, and were up 5.8 percent at euro59.60 in afternoon Frankfurt trading.

Hochtief, which is based in Essen, reported a net profit of euro88.1 million in this year’s first half, up 2.1 percent from a year earlier. Revenue was 3.8 percent higher at euro9.53 billion.

New orders were up 28 percent at euro12.92 billion, and Hochtief’s order backlog also rose 28 percent to euro42.52 billion.

The company said in August that it now expects new orders and the order backlog this year to exceed 2009 levels.

Hochtief has some 70,000 employees.