CIMIC shares soar on possible takeover

Australian contractor CIMIC Group has told shareholders to take no action in response to a takeover proposal from majority shareholder HOCHTIEF that lifted shares by 33 per cent.

Frankfurt stock exchange-listed construction company HOCHTIEF notified CIMIC of its intention to make a $22 per share unconditional bid for the company on Wednesday night.

HOCHTIEF’s largest shareholder is Spanish based company Actividades de Construcción y Servicios, SA (ACS).

A bidder’s statement has since been lodged with the ASX and is set to be dispatched to CIMIC shareholders in the coming weeks.

The offer will be open for a month.

CIMIC issued a response to the ASX this morning, advising shareholders should take no action in response to the bid, and had appointed an ‘independent board committee’ consisting of two independent directors to assess and respond to the proposal.

“CIMIC Group notes the announcement made last night by CIMIC’s majority shareholder, HOCHTIEF Australia Holdings, of its intention to make an off-market takeover offer,” it said in a statement.

“The takeover offer is an unconditional and final cash offer of $22 per share for all of the ordinary shares in CIMIC in which HOCHTIEF does not already have a relevant interest.

“CIMIC shareholders should not take any action in respect of the takeover bid at this stage.”

CIMIC owns CPB Contractors (formerly Leighton Contractors) - one of the largest contracting groups in Australia - and UGL, CIMIC’s specialist end-to-end asset solutions provider.

Both of which have a significant presence in Western Australia.

Recent work for the companies includes a $100 million contract from BHP for CPB to oversee a debottlenecking project at the miner’s Nelson Point iron ore port in Port Hedland.

Chevron brought on UGL to deliver maintenance and turnaround work at its Wheatstone and WA Oil facilities in November, in a contract valued at $400 million.

The CIMIC committee has appointed Gilbert + Tobin as legal adviser and Oaktower Partnership as financial adviser.

The news was enough to send CIMIC shares up 33 per cent to trade at $22.