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German regulator approves Hochtief takeover by ACS

On Tuesday 30 November 2010, 8:59
EST

Spanish construction giant ACS was free Tuesday to launch
formally a bid to take control of rival Hochtief and create one
of the world’s biggest building firms after receiving German
regulatory approval.

Hochtief’s management has said the offer undervalues Germany’s
biggest construction firm, however, although it has stopped
short of publicly declaring the bid hostile.

ACS already owns a stake of just under 30 percent in Hochtief,
which in turn controls Australia’s Leighton, and plans to offer
eight of its shares for every five of Hochtief.

Germany’s financial regulator, Bafin, said late Monday that
ACS’s offer was in accordance with German takeover law,
although the Spanish firm had to make “significant
improvements” to the bid, according to a statement.

The official bid acceptance period will begin once ACS
publishes its offer, expected in early December.

From then, Hochtief shareholders have four weeks to decide
whether they wish to accept the offer.

ACS said in September it aimed to launch its all-share bid for
the 70 percent of Hochtief it didn’t own.

But it added that it aimed only to increase its stake to
slightly above 50 percent so that it could consolidate Hochtief
on its balance sheet.

In an attempt to stymie the deal and provide a “poison pill”
for the Spanish, Hochtief applied to Australian regulators to
force ACS to make a separate and expansive offer to buy
Leighton as well.

But Australia’s Takeover Panel rejected the request and on
Monday turned down an appeal by the German firm.

— Dow Jones Newswires contributed to this story —

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