ACS Consolidates Hochtief Hold With Appointment, Buyback
Actividades de Construccion & Servicios SA, Spain’s biggest builder, appointed a stalwart of its domestic business to the board of an Australian unit, adding to a share buyback to tighten its control of Hochtief AG. (HOT)
Leighton Holdings Ltd. (LEI), majority-owned by Essen, Germany-based Hochtief, appointed Adolfo Valderas Martinez as chief operating officer, the Sydney-based company said in a statement today. Valderas Martinez joins Leighton, Australia’s largest construction, from Iridium Concesiones de Infraestructuras, a Madrid-based ACS unit.
Hochtief is midway through a share buyback that will give ACS control of 59.9 percent of the voting rights in Germany’s biggest building company. Hochtief Chief Executive Officer Marcelino Fernandez Verdes, who’s seeking to stabilize profitability and focus on infrastructure projects, joined the German builder as COO in March 2012 before taking the top job eight months later.
“It is clear that ACS wants to have a tighter control of the operations,” Juan Carlos Calvo, a Lisbon-based analyst at Banco Espirito Santo SA with a buy recommendation on ACS and a neutral rating on Hochtief, said by phone. “Leighton has been facing some concerns about the evolution of the mining business in Australia, also working capital, let alone some scandals from the previous management.”
Leighton shares have tumbled 8.5 percent since Oct. 2 after Australian newspaper the Age reported that former executives knew about the paying of bribes to win contracts, an allegation that one of the managers has denied. Leighton has been under investigation by the Australian Federal Police since at least February 2012 after the company reported potentially illegal activity by a subsidiary in Iraq.
“Adolfo’s experience in managing a leading global company in the construction and operation of government concessions gives him a unique understanding of the development, financing, construction and operation of public infrastructure,” Leighton CEO Hamish Tyrwhitt said in today’s statement.
Valderas Martinez served under Hochtief CEO Fernandez Verdes, another veteran of Madrid-based ACS, at Grupo Dragados about a decade ago. Since 2010, he has run Iridium, which develops, builds and administers government concessions and infrastructure projects. Hochtief owns 56.5 percent of Leighton shares, according to data compiled by Bloomberg, after boosting its stake in July.
ACS owns 58.5 percent of the voting rights in Hochtief, according to an Oct. 28 filing. The Spanish builder owns 49.9 percent of the equity, and at the time of the buyback’s start controlled 54.3 percent of the votes, according to the German company’s website.
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