Ownership shakeup at Leighton Holdings

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A A$1.2 billion ownership shakeup is under way at ASX-listed Leighton Holdings, the owner of one of New Zealand's biggest contractors.

Morningstar analyst Ross MacMillan said Leighton Holdings' majority owner, German builder Hochtief Aktiengesellschaft, had announced a conditional proportional off-market cash offer to raise its shareholding from 58.8 per cent to 74.2 per cent.

"In the past year, Hochtief has been slowing increasing ownership of Leighton, using the Corporations Act provisions, which allow Hochtief to acquire 3 per cent of Leighton every six months, without making a full takeover bid," MacMillan said.

"Nevertheless, Hochtief has now decided to hasten the process and is offering to buy three out of every eight shares held by Leighton shareholders for A$22.15 ($23.38) per share, at a total cost of A$1.2 billion," he said.

Subsequently, Leighton increased its offer to A$22.50 a share.

Leighton Holdings owns New Zealand businesses John Holland and Leighton Contractors.

Leighton, headquarted in Australia, has been operating in New Zealand for more than a decade and has been a key partner in some of the country's most complicated projects, undertaking many for the Government.

The company's work has included the national ultrafast broadband project, the State Highway 16 causeway upgrade in Auckland, work for Chorus, the Newmarket Viaduct replacement, Wellington tunnels' maintenance contract and work at the Favona Gold mine.

Leighton's biggest job at present is as part of the Wellington Gateway Partnership, picked by the New Zealand Transport Agency to deliver the $1 billion Transmission Gully Motorway under a public private partnership arrangement.

Leighton is in that partnership with HEB Construction, InfraRed Capital Partners, Bank of Tokyo-Mitsubishi UFJ and the Accident Compensation Corporation.

"The value to Leighton Contractors is expected to be in excess of $800 million," Leighton Contractors said of Transmission Gully.

Morningstar said Leighton Holdings had endured "large construction project losses, slowing demand for mining services, Middle Eastern business woes ... and board room battles.

"Now, it appears to be on the road to recovery."

But it expressed disappointment with the immediate employment termination of chief executive Hamish Tyrwhitt and deputy Peter Gregg.

Marcelino Verdes has been appointed as the new chief executive of the business.