German regulator approves ACS bid for Hochtief

FRANKFURT (BestGrowthStock) – German financial regulator BaFin has approved Spanish construction group ACS’s (ACS.MC: ) takeover bid for German peer Hochtief (HOTG.DE: ), stifling Hochtief’s chances of fending off the hostile attack.

ACS’s non-cash eight-for-five share offer for Hochtief was deliberately priced below the prevailing market price because ACS, which is headed by Real Madrid president Florentino Perez, is not seeking 100 percent acceptance but the right to buy Hochtief stock beyond 30 percent.

ACS has said it plans to accumulate a controlling stake of 51 percent over time.

At Monday’s closing share prices for Hochtief and ACS, the offer is valued at around 3.8 billion euros ($5 billion).

In an extraordinary general meeting earlier this month, ACS shareholders voted in favor of giving management authority to issue new shares equivalent to up to 50 percent of the company’s outstanding shares.

Under German rules, bidders must show they can finance a planned takeover.

BaFin said in its statement late on Monday that it had demanded significant improvements to the ACS offer, adding it usually requires a capital increase where a takeover offer involves a share offer. ACS has previously said the need to issue new shares is unlikely as it does not expect a large take-up by Hochtief shareholders.

Since initial talk of the takeover, Hochtief has explored a number of options to foil the unwanted bid, including seeking a white knight, a plan for which German Chancellor Angela Merkel has quietly signaled support.

(Reporting by Josie Cox and Matthias Inverardi, writing by Victoria Bryan; Editing by Tim Dobbyn)

German regulator approves ACS bid for Hochtief