Until last week, Essen-based Hochtief had been hopeful that the German government would protect it from a takeover bid by Spain's Actividades de Construccion y Servicios (ACS), by changing existing securities laws. But no such luck.

Economics Minister Rainer Bruederle said that although he would like to see the company's headquarters remain on German turf, he was not willing to intervene in the market process. And Chancellor Angela Merkel agreed on both counts.

That was the end of that, but not the end of the story. On Sunday, Germany's weekly news magazine Der Spiegel reported that Hochtief is now in talks with Qatar, thanks, no less, to Mrs Merkel.

A spokeswoman for the coveted construction company told reporters that during an industry leaders dinner at Berlin's presidential palace, the German chancellor had taken the opportunity to introduce Hochtief chief executive Herbert Luetkestratkoetter to the Qatari economics minister.

Should Qatar decide to get on board with its sovereign wealth fund, it would be as a 'white-knight' investor, a role it has played in the past for the Volkswagen group.

Australian assistance

But Hochtief is not leaving its fate solely in the lap of the Middle East. The company is also looking to Australia, home of its hugely successful subsidiary Leighton Holdings, to bolster its defenses.

Last week, the German company applied to the Australian Takeovers Panel to try and force ACS to make a fully priced bid for outstanding shares in Leighton, which contributes some 80 percent of Hochtief's total earnings and is therefore particularly attractive to the heavily indebted Spanish bidder.

On Monday, Leighton upped the pressure by making its own application to the panel to block the all-share bid on the grounds that it would rob the company of its independence.

"Although Hochtief owns 54.5 percent of Leighton, Leighton is not in the normal position of a controlled 'downstream' entity," Leighton chairman David Mortimer said in a statement.

Under the current governance arrangements between the German company and its Australian subsidiary, Leighton has an independent board and management.

Protecting minority shareholders

Furthermore Mortimer said that to allow a takeover by ACS - which currently holds a 29 percent stake in Hochtief - without a commitment to retain Leighton's independence status or any obligation to make a cash bid for the subsidiary would not be in the interests of shareholders.

"Leighton's independent directors are concerned that German takeover law does not provide the same level of protection for the interests of minority shareholders that investors expect of companies listed on the Australian Securities Exchange," he said.

The Australian Takeovers Panel has three weeks to decide whether the Spanish bid for Hochtief is in actual fact a bid for Leighton, and whether minority shareholders would be disadvantaged a successful takeover.

If the regulators find in favor of Leighton, it could double the money ACS would need to buy a controlling stake in the German company.

Author: Tamsin Walker (dpa, AFP)
Editor: Sam Edmonds