German watchdog may block ACS’ Hochtief bid: report

FRANKFURT (BestGrowthStock) – German financial regulators are likely to block a takeover bid by Spain’s largest construction group ACS (ACS.MC: ) for German peer Hochtief (HOTG.DE: ), a German magazine reported.

German watchdog BaFin, due to decide by Monday, has considerable qualms about ACS’s request to clear its offer to Hochtief shareholders, magazine Der Spiegel reported on Saturday, without specifying its sources.

A person familiar with the matter told Reuters that talks between BaFin and ACS would continue over the weekend and that regulatory approval was hanging in the balance.

A BaFin spokeswoman said a final decision had not yet been made. An ACS spokeswoman in Germany declined to comment.

A spokeswoman for Hochtief, which has vigorously tried to fend off ACS’s approach, said the company was eagerly awaiting BaFin’s ruling.

ACS’s non-cash eight-for-five share offer for Hochtief was deliberately priced below the prevailing market price because ACS is not seeking 100 percent acceptance but the right to buy Hochtief stock beyond 30 percent.

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

Under German rules, any bidder has to show it can “finance” a planned takeover and ACS shareholders on November 19 backed a possible rights issue designed to placate German regulators.

Some shareholder rights activists have, however, lodged a legal complaint against the vote that allowed ACS to raise its capital.

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.

ACS has said the need to issue new shares is unlikely given it does not expect a large take-up by Hochtief shareholders.

(Reporting by Alexander Huebner, Matthias Inverardi; Writing by Ludwig Burger; Editing by Ruth Pitchford)

German watchdog may block ACS’ Hochtief bid: report