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FRANKFURT May 12 Hochtief, majority-owned by Spanish builder ACS, has raised its stake in Leighton Holdings to nearly 70 percent, tightening its grip on Australia's biggest construction company and paving the way for its restructuring.
Since ACS took effective control of Hochtief in 2011, the German firm has undergone wide-ranging changes to increase its profitability, including cost cuts and the sale of airports and other non-core assets for about 1.8 billion euros ($2.5 billion) last year.
Hochtief has in turn been seeking to increase its control over Leighton to push through its restructuring plans for the Australian builder, though it has not yet given details of the plans.
Hochtief had offered to buy about 37.49 million shares at 22.50 Australian dollars ($21.03) each, and the offer closed on Friday. It has raised its stake to 69.62 percent, it said on Monday, an increase of 10.85 percentage points from its previous holding of 56.77 percent.
That fell short of the 74.2 percent stake Hochtief had hoped to get from the offer.
"They didn't get the full 74 percent. But with 70 percent they have the majority and the next step they'd do is to buy additional shares by November," said Frank Laser of Warburg Research.
Hochtief Chief Executive Marcelino Fernandez Verdes, who also became Leighton CEO in March, told analysts last week a "weighted involvement" in the Australian firm would enable Hochtief to pursue its worldwide restructuring more vigorously and efficiently.
Leighton is in Hochtief's Asia-Pacific division, which saw pretax profit rise by over a fifth to 499.8 million euros ($687.55 million), despite a weaker Australian dollar that reduced the value of new orders, work done and sales last year compared with 2012.
Analysts said they expect Hochtief to sell non-core assets at Leighton as well as refocus its construction and contract-mining business.
ACS's stake in Hochtief recently rose to around 55 percent, from around 49 percent, when the German builder cancelled 10 percent of its treasury stock.
($1 = 0.7269 Euros; $1 = 1.0697 Australian Dollars) (Reporting by Marilyn Gerlach; Editing by Jonathan Gould and Pravin Char)