Hochtief accuses ACS of shareholder collusion

05 January 2011

Hochtief has approached German financial regulator BaFin over concerns that ACS colluded with an investor in order to secure a substantial slice of Hochtief shares.

In a final effort to scupper ACS's bitterly contested takeover approach, Hochtief CFO Burkhard Lohr said in an interview in the German press that he expected BaFin to declare the Actividades de Construcción y Servicios (ACS) bid void as a result of this alleged collusion.

The shareholder involved is Southeastern Asset Management, which owns stakes in both Hochtief and ACS.

Southeastern's 16 December decision to boost ACS's takeover bid for the German contractor by pledging to hand over half of its total 5% holding in Hochtief is likely to have been crucial in ACS's drive to build a 30% stake on the company.

Indeed, ACS announced on 4 January that had increased its holding in Hochtief to 30,34%, breaching a key ownership threshold under German takeover law.

BaFin rules state that the Spanish contractor can now keep buying shares on the open market to secure a majority holding of over 50% without having to make a mandatory bid for the whole of the company.

But just when it would appear that Hochtief had lost its fierce battle against ACS's approach, Mr Lohr suggested in an interview with Germany's Handelsblatt newspaper that Southeastern had acted in concert with ACS.

However, both ACS and Southeastern strongly refute this allegation.

In a statement, Southeastern Asset Management confirmed that it received a letter from BaFin on 21 December in relation to its ownership in ACS and Hochtief.

"The questions were straight forward and there is no allegation of wrongdoing. Southeastern answered the questions promptly by the 28 December, 2010," the company said.

A spokesperson from ACS also denied that there had been any collusion with shareholders, adding that the company only had details of the number of shares sold during the tender period, and not the shareholders which sold them.

An announcement on the final outcome of the number of Hochtief shares tendered to ACS is expected towards the end of this month, after a second acceptance period for the bid ends on 18 January.