Frankfurt: German builder Hochtief was preparing to lose its fight for independence from Spanish predator ACS yesterday, revealing a deal with its creditors to allow for the change of control.

Hochtief's lenders have waived their right to cancel credit lines should any shareholder hold more than 30 per cent, Hochtief's chief financial officer said in a newspaper interview, smoothing the way for the much more heavily indebted ACS to build a controlling stake.

He said lenders were happy that the company was well capitalised enough, thanks in part to its sale of a 9.1 per cent stake to the government of Qatar in December.

That move was seen at the time as a defence against the takeover.

"Considering the significant probability of (ACS being able to surpass the 30 per cent threshold), we asked our lenders under what circumstances they would waive the change of control clauses," CFO Burkhard Lohr told Germany's Boersen Zeitung daily.

"In this sense, the capital increase and Qatar Holding's share acquisition were worth gold."

By the end of yesterday, ACS needed to have control of more than 30 per cent of Hochtief under a nine-for-five, all-share offer to give it the right under German takeover law to increase its stake further by buying shares in the market.

Raising its stake

ACS indicated it planned to raise its stake to 50 per cent.

It hopes to benefit from Hochtief's stronger balance sheet, reduce its dependence on the bombed-out Spanish construction industry and bulk up to win more international projects.

Net debt at ACS stood at ¤9.08 billion (Dh43.76 billion) at the end of September. Hochtief puts its own debt at just ¤447 million.

Voting rights

Yesterday, ACS said its stake was approximately 29.40 per cent, or 22,637,567 voting rights. Sources familiar with the deal said last week that ACS' calculations exclude a 2.5 per cent stake pledged by key shareholder Southeastern Asset Management — which is also a top investor in ACS.

Burkhard said the agreement with creditors would protect Hochtief's creditworthiness and also allow it to avoid paying ACS a special dividend.

ACS, headed by Real Madrid soccer club president Florentino Perez, last week said that it had cleared the way to own 30 per cent through the support of Southeastern.

Hochtief's sale of a 9.1 per cent stake to Qatar diluted ACS's stake in Hochtief to around 27 per cent from 29.9 per cent, but ACS responded by sweetening its bid, offering nine ACS shares for every five Hochtief shares, up from its previous eight-for-five offer.

The offer, launched on December 1 but first mentioned more than three months ago, was to expire at midnight last night.

ACS said that it would announce the total number of shares tendered during the period, on January 4. Shares in Hochtief were trading 0.1 per cent lower yesterday, narrowly under performing Frankfurt's 0.3 per cent higher mid-cap index. Shares in ACS were trading 0.3 per cent higher.