Qatar government takes 9,1% stake in Hochtief

07 December 2010

Dr Lütkestratkötter, chairman and CEO at Hochtief

State-owned investment vehicle Qatar Holding LLC has taken a 9.1% stake in Hochtief through the purchase of some 7 million newly issued shares. The acquisition has given the German contractor a capital injection of € 400 million, and will also put an obstacle in the way of the hostile takeover bid for Hochtief from ACS.

Hochtief issued the new shares directly to Qatar Holding without first giving subscription rights to existing shareholders. The company's board was given the authority to do this by a resolution at its May 11 general shareholders meeting.

"The cash inflow from the capital increase strengthens the financial position of Hochtief, In addition, it provides latitude for the announced further growth after the planned bond issue had to be called off in mid-September," said Hochtief CEO Dr Herbert Lütkestratkötter.

He continued, "We welcome Qatar Holding as our new major shareholder. Qatar has recognised the capability of the Hochtief Group, the success of our strategy as well as the benefits of a close partnership. We will now be supporting each other in our development."

The state of Qatar is also a major shareholder in Vinci, Europe's largest contractor. State-owned investment company Qatari Diar has a 5,78% stake in the French contractor following the sale of mechanical & electrical contractor Cegelec to Vinci in an all-share deal earlier this year.

ACS implications

The deal is also a blow to ACS, which is currently trying to take controlling shareholding in Hochtief by means of an all-share acquisition. By issuing new shares, Hochtief has diluted ACS' existing shareholding in the company from 29.98% to 27.26%.

The share issue will also make the acquisition more expensive for ACS. In order to achieve a 50% holding in Hochtief, ACS must now acquire a further 17.5 million Hochtief shares instead of the 14 million required prior to the share issue to Qatar holding.