The Australian Securities and Exchange Commission is set to investigate possible insider trading at construction giant Leighton Holdings following a $1.15 billion bid to increase its holding in the company from just over 58 percent to almost 75 percent, media reports say.
The Sydney Morning Herald has reported that the Australian Securities and Exchange Commission will investigate a share price surge from a close of $18.21 last Wednesday to reach an intraday high of $20.26 during trading on Friday in the lead up to yesterday’s announcement, under which Hochtief offered to purchase three out of every eight Leighton shares it does not already own in exchange for cash of $22.15 per share.
“It would be something we would review in the ordinary course of our day-to-day market surveillance activities” an ASIC spokesperson is quoted as saying in the report.
The report follows a ‘please explain’ notice sent by Australian Stock Exchange (ASX) Senior Advisor Lux Wingneswaran to Leighton Company Secretary Vanessa Rees following the share price surge – in response to which Rees advised Wingneswaran the company was unaware of any price sensitive information which was yet to be disclosed.
In response to a subsequent enquiry yesterday following the announcement of the Hochtief offer, Leighton said it its Chairman Robert Humphries was first made aware of Hochtief’s intention to make an offer on Sunday and the company was not advised of the terms until yesterday morning – at which time it requested the opening of trading of its shares to be delayed until 11:30am so that Hochtief could make its announcement before shares started trading.
The latest bid is widely being seen as a bid by Spanish construction giant ACS (parent company of Hochtief) to seize greater control over Leighton as part of its effort to amass a global construction empire.
Hochtief has not yet indicated whether it would keep current chief executive officer Hamish Tyrwhitt in charge at Leighton - though as a majority shareholder as things stand, Hochtief could indeed keep or dispense with Tyrwhitt irrespective of the outcome of the latest offer.