Leighton Holdings Limited (ASX: LEI) today said it will be making an application to the Takeovers Panel seeking a declaration of unacceptable circumstances and consequent orders in relation to the proposed takeover bid by Spanish company Actividades des Construcción y Servicios' (ACS) for Leighton's German parent Hochtief AG.

The pending application to the Takeovers Panel was in keeping with the recent decision by the Australian Securities and Investments Commission (ASIC) that the Takeovers Panel is the appropriate authority to require ACS to commit to a governance regime that protects Leighton's minority shareholders or otherwise make a "downstream" cash bid for Leighton at an appropriate price.

Leighton Chairman David Mortimer said "The primary interest of Leighton's Independent Directors is to ensure the protection of Leighton's minority shareholders. Although Hochtief owns 54.5 per cent of Leighton, Leighton is not in the normal position of a controlled "downstream" entity. Under the current governance arrangements between Hochtief and Leighton, Leighton operates under an independent board and management," said Mr Mortimer.

"Leighton believes these governance arrangements, which have been in place for a long period, have contributed substantially to the value created for all of Leighton's 67,000 shareholders.

"If ACS succeeds in gaining control of Hochtief, control of Leighton will pass in a substantive and practical sense for the first time without ACS having committed to a governance regime that provides for Leighton's independence. 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, and are determined to ensure that the interests of Leighton minority shareholders are protected in any such change in control," Mr Mortimer said.

As of 1235 AEDT, shares in Leighton lifted 95 cents or 2.56 per cent at $37.99.