UPDATE 3-Hochtief takes ACS battle to next level

* Hochtief takes appeal to higher Australian authority

* To ask Takeovers Panel to force ACS to bid for Leighton

* Australian regulator ASIC already denied help

* ACS says plans to proceed with offer

* Hochtief shares up 0.2 pct, ACS down 0.2 pct

(Adds ACS comment)

By Josie Cox

FRANKFURT, Oct 20 (BestGrowthStock) – Hochtief AG (HOTG.DE: ) made
another push to scupper a low-ball bid from Spanish predator ACS
(ACS.MC: ) on Wednesday after an Australian regulator refused to
back the German construction group.

Hochtief and its Australian unit Leighton Holdings (LEI.AX: ),
of which it owns 54 percent, had asked Australian regulators to
help them fend off ACS’s unwanted no-premium approach that
values Hochtief at around 3.7 billion euros ($5.1 billion).

The Australian Securities and Investments Commission (ASIC)
declined late on Tuesday to grant Hochtief’s request to force
ACS to make an offer for both Hochtief and subsidiaries
including Leighton, a Hochtief spokesman said.

That moves any decision on the matter to the next-higher
authority.

“Following the decision by the ASIC not to require the
Spanish construction company to submit a takeover offer for
Leighton Holdings, it is now up to Australia’s Takeovers Panel to
make such a decision,” Hochtief said.

ACS responded on Wednesday by saying it intends to proceed
with its offer as planned, expecting the acceptance period for
its all-share bid to begin at the end of November.

The group added it was confident that Australia’s Takeovers
Panel would confirm ASIC’s refusal to back Hochtief.

“Following the successful completion of the offer, ACS will
support Hochtief continuing its successful 27-year relationship
with Leighton in its existing form,” ACS said in a statement.

FOOTING THE BILL

ACS’s deliberately low-priced bid consisting of eight of its
own shares for every five of Hochtief — in which it already
holds 29.9 percent — is designed to let the Spanish company
gradually up its stake without having to offer a premium for
control. [ID:nSGE69H01M]

At the minimum price set by German regulators, the proposed
deal values Hochtief at 50.97 euros per share.

Shares in Hochtief initially dropped about 1 percent but
were trading 0.2 percent higher at 61.86 euros by 1043 GMT, in
line with Germany’s mid-cap index (.MDAXI: ).

ACS shares eased 0.2 percent to 37.70 euros.

ACS’s primary goal of gaining a majority stake of Hochtief
would cost about 735 million euros under the existing terms.

“Hochtief’s decision to appeal to the Takeovers Panel comes
as a bit of a surprise to me, I don’t understand why ASIC did
not grant Hochtief’s request, but I still don’t see how the
takeover could go ahead,” one Frankfurt-based trader said.

He added he did not believe ACS would be able to foot the
bill if it was forced to make a bid for Leighton too.

If the Spanish company ends up having to acquire Leighton
and its subsidiaries too, the takeover bill would rise by at
least $5.15 billion.

Hochtief has enlisted Credit Suisse (CSGN.VX: ), Goldman Sachs
(GS.N: ) and Deutsche Bank (DBKGn.DE: ) as advisers and has already
explored a number of options to foil the bid.

On Sunday, a German cabinet source told Reuters Germany is
considering tightening its takeover laws in view of the
acquisition attempt. [ID:nLDE69G0BQ]

Chancellor Angela Merkel said last week Hochtief should
remain based in Germany. [ID:nBAT005709] [ID:nLDE69E0G2]
(Additional reporting by Anneli Palmen; Editing by David Holmes
and Michael Shields)
($1=.7264 Euro)

UPDATE 3-Hochtief takes ACS battle to next level