Hochtief CEO will talk to ACS as shareholders: report

FRANKFURT (BestGrowthStock) – Hochtief (HOTG.DE: ) does not regard the takeover bid by Spanish builder ACS (ACS.MC: ) as hostile and will agree to talks with them “as a shareholder” Hochtief’s Chief Executive told German weekly Der Spiegel.

If the Spaniards — who hold a stake of around 27 percent in the German construction company — seek talks as a shareholder then he is “open for every dialogue, also with ACS,” Herbert Luetkestratkoetter told Der Spiegel according to an extract of its Monday edition.

A spokeswoman for Hochtief confirmed Luetkestratkoetter had spoken to Der Spiegel but declined to comment further. ACS, headed by Real Madrid soccer club president Florentino Perez said it was seeking control of Hochtief in September, and launched a formal bid for control on December 1.

Hochtief’s management reacted by seeking authority to explore measures to fend of the ACS bid, and by selling a 9.1 percent stake to the emirate of Qatar. ACS saw its 29.9 percent Hochtief stake diluted to around 27 percent after the move.

The CEO said there were currently no talks with ACS and talks had not taken place even in the immediate aftermath of ACS making its intentions to seek control known.

Because he was unaware of the Spanish builder’s intentions, and because he wanted to take a holiday, Luetkestratkoetter took some days off rather than pursuing talks, he told the German publication.

The CEO said he is skeptical about a strategy which relies on merely combining the portfolios of ACS and Hochtief to achieve economies of scale and better regional diversification.

“Size alone is not an advantage. It’s about know-how. It’s about having a presence in economically attractive parts of the world. Hochtief is in a good position. I cannot see where ACS can help us,” he told Der Spiegel.

Luetkeststratkoetter nonetheless insists he does not regard the ACS bid as hostile.

“I’m not talking about a hostile takeover. Mr. Perez and I – we have different interests,” Luetkestratkoetter told Der Spiegel. “And I have to do things the Spaniards don’t like.”

The deal with Qatar which was completed this week is “not an act of desperation” but a strategic move to position Hochtief for contracts to build football stadiums for the world cup in 2022, Spiegel reported.

“If it now appears like this was a move to hinder ACS, then this is a side effect,” the CEO said.

The move nonetheless enraged some shareholders to such an extent that they demanded the bosses at Hochtief should quit. Southeastern Asset Management condemned the price of Hochtief’s 9.1 percent stake sale to the Gulf state and the way it was carried out.

Luetkestratkoetter brushed off the measures as legitimate because they were not “purely defensive” in nature. “I am convinced we have not broken the law,” he told Der Spiegel.

Upon being asked whether Hochtief would make use of its ability to increase capital by a further 20 percent, Lutkestratkoetter said, “Currently we have no plans.”

(Reporting by Edward Taylor)

Hochtief CEO will talk to ACS as shareholders: report