Leighton looks to raise stakes for Spain’s ACS

MELBOURNE (BestGrowthStock) – Australian builder Leighton Holdings (LEI.AX: ) upped the stakes on Monday for Spanish predator ACS (ACS.MC: ), demanding ACS be ready to make a fully priced, cash bid for Leighton should regulators require it to do so.

ACS has launched a hostile all-share bid for Leighton’s German parent, Hochtief (HOTG.DE: ), a move that Hochtief says should trigger a mandatory bid for all of Leighton’s minority interests, which have a market value of $5.15 billion.

Hochtief has formally asked Australian regulators to force ACS to buy out the rest of Leighton should it be taken over.

Leighton went one step further on Monday, demanding that ACS make a full, cash bid for Leighton’s minority shareholders in the event that the markets watchdog agrees to Hochtief’s request.

“For value to be protected for all shareholders, Leighton considers that any ACS bid required by (regulator) ASIC…be a fully priced cash bid for the minority stake which recognizes the inherent value in the company, including a premium for control,” Leighton Chairman David Mortimer said in a statement.

Hochtief says ACS is trying to grab Leighton on the cheap with its proposal to take control of Hochtief.

The prospect of ACS having to buy out Leighton is considered highly unlikely by regulatory experts, but it remains a worrying possibility for the Spanish company, which was not bargaining on buying out the 45.5 percent of Leighton not owned by Hochtief.

Under Australian law, any shareholder looking to own more than 20 percent of an Australian firm must make a full takeover offer, but there is an exemption for situations where the target is an offshore parent company, not the Australian subsidiary. To qualify for the exemption, the offshore parent must be listed on one of several overseas exchanges, including Germany.

Lawyers have said it made no sense for the commission to amend the exemption rule solely for this case.

Leighton spokesman Christian Sealey said the regulator has not given Leighton any indication on which way it will rule.

“We’re just getting out there on the front foot, trying to look after our minority shareholders,” Sealey said.

Leighton’s shares rose 0.8 percent on Monday to A$37.75, outperforming a 0.3 percent fall in the broader market (.AXJO: ).

(Reporting by Sonali Paul; Editing by Mark Bendeich)

Leighton looks to raise stakes for Spain’s ACS