The $1.5 billion acquisition, fueled by Hochtief (controlled by ACS), Cimic’s largest shareholder, saw the German builder lock 87.8 percent of 78.58 percent of the Australian firm before embarking on a hostile bid in late February. . But part of this increase was obtained by buying shares in the market rather than accepting Hochtief’s offer.
Under Australian takeover laws, Hokdeef must acquire 95.92% of Simik by April 11, the deadline for an immediate takeover of the other construction team.
If Hochtief gets more than 90 percent of cimic and doesn’t get 95.92 percent, he can try to take the remaining shares by force, but it will be a long process.
Hochtief must obtain a report from its independent expert stating whether it represents a fair value of the stock and must send an objection form to shareholders within six months of completing the acquisition. Hochtief also has the option to extend the acquisition deadline beyond April 11.
The acquisition attempt was recommended by two independent Cimic directors, but an independent report by Grant Thornton, who is appointed by the directors, notes that the franchise commands a lower premium than other recent acquisitions in the mining and engineering industry.
A shareholder in CIMIC (when it was known as Leighton Holdings), who began buying shares in the company in the early 1990s, said the acquisition was “completely opportunistic” and that he believed the company was worth $30 a share.
The investor said he has sold two-thirds of his shares in the market since the cash offer of $22 per share was announced because it was held in public self-managed funds and had not decided to sell the remaining shares.
Analysts at Morningstar said in late March that the takeover bid for Hochtief was swinging “50-50” toward success. The review team estimates the fair value of SIMIC shares at $27.75 per share.
Although Hochtief Cimic’s track record could move forward if the takeover bid fails, the company appears to be “on the cusp of a drastic change” as it earns billions of dollars from new ventures, Morningstar said.
Separately, Simik resigned from managing Wendia, a listed services group, in November. Cimic owns approximately 33 percent of Wendy’s and has the right to nominate two board members. But UGL, a wholly owned subsidiary of Cimic, is competing with Vendia.
Simik said last week that he would fire his directors’ nominees from Wendy’s board and would avoid any involvement in appointing future directors or the service company’s CEO.
Simik said the construction team can now account for its investment in Wendia as a financial asset, with a one-time, undisclosed cash return.
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