ACS may be forced to launch mandatory Hochtief bid

FRANKFURT (BestGrowthStock) – Spain’s ACS (ACS.MC: ) could end up having to make a pricey mandatory takeover offer for control of Hochtief (HOTG.DE: ) if it fails to raise its stake in the German builder to more than 30 percent with its current voluntary offer, German regulator BaFin said.

“If ACS fails to secure more than 30 percent within the current tender period, it will be forced to make a mandatory takeover offer if it reaches the 30 percent threshold at a later point in time,” BaFin spokeswoman Sabine Reimer told Reuters on Monday.

Hochtief earlier announced plans to raise capital and sell a 9.1 percent stake to Qatar, a move that will dilute the Spanish builder ACS’ 29.9 percent stake in Hochtief, making it harder for it to surpass the 30 percent threshold with its current offer.

ACS had won an exemption from making a mandatory takeover offer under German regulation by submitting its voluntary bid, but the exemption will lapse if it fails to reach 30 percent within the tender period, ending on December 29.

If it then still seeks majority control of Hochtief, it will have to file a new takeover offer as soon as its stake increases beyond 30 percent, BaFin said.

ACS is currently offering eight of its own shares for every five of Hochtief’s, valuing the bid at 57.3 euros per Hochtief share, or about 4 billion euros ($5.3 billion) for the whole company, a 9 percent discount to current market prices.

In a mandatory offer, it would be forced to pay at least the 3-month volume-weighted average of Hochtief’s share price, which is determined by BaFin.

Hochtief’s share price has gained almost 10 percent over the past three months, with an increase of almost 12 percent since ACS announced it wants control of Hochtief on September 16.

(Reporting by Edward Taylor; Additional reporting by Alexander Huebner)

ACS may be forced to launch mandatory Hochtief bid