Qatar buys stake in Hochtief, complicating ACS bid
JUERGEN BAETZ - AP - 14 mins ago
FILE - The Nov. 8, 2010 file photo shows a worker of German construction company Hochtief at a construction site in Duesseldorf. western Germany. Germany's largest builder Hochtief AG said Monday,...
Related Stocks
VLKPY - Volkswagen Ag Pfd Sh
Sym Last Chg Pct
VLKPY 36.0500 +1.5100 +4.37%
VLKAY 30.7600 +0.9000 +3.01%
BERLIN (AP) — Qatar's investment company has agreed to buy a 9.1 percent stake in Germany's largest builder Hochtief AG for euro400 million ($530 million) — complicating an unfriendly takeover bid from Spanish construction firm ACS.
Hochtief said Monday its board decided to directly issue new shares that will be bought by the state-backed Qatar Holding LLC at a price of euro57.114 per share, close to the current stock value.
The move comes as a blow to ACS, Hochtief's major shareholder and suitor, which will see its near 30 percent stake diluted and possibly face tougher resistance to its takeover bid.
Hochtief said it has agreed with the Qatar holding "to intensify the existing cooperation and to explore further areas for strategic cooperation."
Investors cheered the news and Hochtief's shares in morning trading were up by 2.7 percent to euro61.74 in Frankfurt.
Hochtief has opposed ACS' approach, saying it does not add any value for shareholders, and hundreds of its employees took to the streets in Berlin in October in protest.
ACS, which is run by football team Real Madrid's president Florentino Perez, is the largest shareholder in Hochtief. Its takeover bid seemed almost done last week after Germany's financial market regulator cleared the offer on Monday and ACS formally published its euro2.7 billion takeover bid Wednesday.
The ACS bid was not mentioned in Hochtief's statement on Monday.
When discussing future cooperation with Qatar, Hochtief stressed its already strong presence in the sheikdom, where it employs some 5,000 people through subsidiaries and is involved in several large infrastructure projects.
Hochtief's interests outside Germany include U.S. unit Turner Construction Co. and a majority holding in Australia's Leighton Group. The company is based in Essen and has some 70,000 employees.
The natural gas-rich Gulf Emirate Qatar, which was awarded the 2022 Football World Cup last week, is to invest billions for major infrastructure projects, among them sports venues and a railway network.
Hochtief in April also formed a joint venture with a state-backed Qatar real estate development company and is to build a city for some 200,000 inhabitants from scratch. The new city, Lusail, is also meant to be a host city of the 2022 World Cup.
The sheikdom is not an unfamiliar investor to German companies, and government officials here repeatedly praised them for being solid long-term investors.
In another takeover battle, Qatar jumped in last year to acquire a 17 percent voting stake in Germany's Volkswagen AG as mounting debt forced Porsche to give up its takeover bid for the much larger Volkswagen group. Qatar is now Volkswagen's third-biggest shareholder.
Also last year, an investment firm owned by Qatar's sovereign wealth fund, the Qatari Diar Real Estate Investment Company, signed a $26 billion deal with German national railway operator Deutsche Bahn AG to build a railroad network from scratch — a key part of the sheikdom's expansion plans.
German chancellor Angela Merkel in September said Qatar was welcome as an investor in Germany, adding "the cooperation of Qatar and the Volkswagen AG is an outstanding example for that."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
AI
