Leighton, ACS agree on governance framework
Leighton Holdings Ltd (ASX: LEI), Australia's largest project development and contracting group has concluded discussions with Spanish builder Actividades de Construcción y Servicios SA (ACS) in relation to a governance framework to protect the interests of the Company's minority shareholders should ACS acquire control of Leighton's major shareholder, Hochtief AG.
The discussions have resulted in a formal undertaking by ACS which enshrines the existing governance arrangements in place between Leighton and Hochtief.
Leighton's Chairman, Mr David Mortimer, said, "The existing governance arrangements, which have been in place for a long period of time with Hochtief, have contributed substantially to the value created for all of Leighton's 67,000 shareholders.
ACS has confirmed that it does not intend to make any changes to the current arrangements which exist between Leighton and Hochtief," said Mr Mortimer.
The formal undertakings by ACS provide commitments that Hochtief does not intend to increase its shareholding beyond a maximum of 55 per cent.
Hochtief will also have the right to appoint up to four out of a maximum of 12 Leighton directors. The other Leighton directors shall be either independent non-executive directors or executive directors.
They also commit to maintaining the structure and current name of each group and fully supporting the Leighton management in developing the company on the basis of the existing Group and divisions business plans into a multi-disciplined Group operating in the areas of construction, mining, telecommunications, environment, services, property development and any other business approved by the Leighton Board.