Hochtief flags Leighton Job Cuts

Monday, March 17th, 2014
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Hochtief has flagged widespread job cuts to construction group Leighton Holdings’ 56,000-strong global workforce as shareholders consider a $1.2 billion bid to increase its stake in the company.

Germany-based and Spanish-owned construction company Hochtief is undertaking a review of Leighton and considering whether to merge or abandon its John Holland and Thiess businesses.

The move comes after Hochtief secured support from Leighton’s board to take a greater stake in the company.

“As a result of the general review by Leighton, already under way, some employees may become redundant,” Hochtief said in a statement lodged on Friday and confirmed by Leighton to the market on Monday.

Last week, Leighton axed chief executive Hamish Tyrwhitt and chief financial officer Peter Gregg, in line with Hochtief’s request to change Leighton’s management and board.

Mr Tyrwhitt has been succeeded by Hochtief chief executive Marcelino Fernandez Verdes.

Hochtief on Thursday lifted its offer for three out every eight Leighton shares to $22.50 per share, from its March 10 bid of $22.15 per share.

The general review of Leighton, looking at making Leighton’s businesses more efficient, is expected to be completed by the end of 2014.

“The outcome of this review may result in changes to the structure of the operating businesses, including changes to the way in which those businesses are managed, changes in the number and functions of employees required in each operating unit and the possible divestment of certain assets or businesses,” Hochtief said.

Hochtief will lift its stake in Leighton from 58.77 per cent to a maximum of 73.82 per cent, for a total price of about $1.2 billion, subject to Foreign Investment Review Board (FIRB) approval.

Leighton shareholders will retain a dividend of 60 cents per share.

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