Construction giant Leighton Holdings is in further turmoil as two senior executives have been sacked and the board has recommended an improved purchase offer from parent company Hochtief.
In a stunning announcement to the Australian Stock Exchange, Leighton said the employment of chief executive officer Hamish Tyrwhitt and chief finance officer Peter Gregg had been terminated, whilst directors Paula Dwyer, Russell Higgins and Vickki McFadden would leave the board by no later than the conclusion of the annual general meeting on May 19.
“The employment of Chief Executive Officer Hamish Tyrwhitt and Deputy Chief Executive Officer and Chief Financial Officer Peter Gregg has been terminated and they have both resigned from the Board, effective immediately” Leighton said in a statement.
Tyrwhitt has been replaced by current Hochtief AG CEO Marcelino Fernandez Verdes on conditions yet to be determined whist Hochtief will secure another two representatives on the board – Pedro Lopez Jimenez and Jose Luis del Valle Perez.
Chairman Robert Humphries will remain in his role in a new arrangement which will see the board comprised of five non-executive independent directors, four non-executive Hochtief nominees and the chief executive officer.
The sackings follow moves on the part of Hochtief to up the ante on Leighton by lifting an offer to purchase three out of every eight shares it did not already own from $22.15 in cash to $22.50 and removing all conditions apart from approval by the foreign investment review board – an offer now recommended by independent directors of the board and representing a 35.1 percent premium over the three month weighted average price to March 7.
As with the previous offer, shareholders on the register as at March 21 will still be entitled to receive a 60c per share dividend on April 4.
The purchases will see Hochtief increase its stake to almost 75 percent in Leighton.
Independent Leighton directors pushed for a complete takeover offer, but Hochtief did not agree to this.
Leighton agreed to Hochtief’s request earlier this week for Tyrwhitt and Gregg to go after it became clear the latter would achieve board control at the company’s AGM.
In a statement, Humphries paid tribute to Tyrwhitt and Gregg.
“Hamish and Peter have both been outstanding leaders of our business, having successfully brought Leighton through a period of stabilisation and set the company on a pathway to growth by substantially rebasing our operations” Humphries said.
“I am personally grateful for the dedication, drive and leadership Hamish has shown during his 27 years of distinguished service with the Group and for Peter’s excellent contribution to our financial and strategic direction through a challenging time in the Company’s history.
“I am proud to have worked with them and I wish them every success.”
Shareholders are expected to receive a bidder’s statement outlining Hochtief’s full offer by the end of March.
Leighton has appointed UBS Investment Bank to act as financial advisor and Allens as legal counsel in regard to the deal whilst Herbert Smith Freehills is acting as legal counsel to the independent directors.