* Says holds 33.49 percent of Hochtief after bid
* Hochtief CEO says will proceed with concessions unit sale
* Can now raise stake past 50 percent without full bid
* ACS core shareholder Alba sells 5 percent, shares drop 8.6 percent
(Adds details from Hochtief conference call)
By Jonathan Gleave
MADRID, Feb 3 (Reuters) - Spanish construction and services group ACS passed the 30 percent threshold with its stake in German builder Hochtief, allowing it to raise its holding further without another full bid.
Hochtief's chief executive, who has fiercely fought ACS' attempt to take control, said on Thursday he is proceeding with the sale of the group's concessions business, a move which could make it more expensive for ACS to get a controlling stake.
ACS shares fell sharply, dragged lower by a discounted share sale by its biggest shareholder.
ACS does not have a regulatory deadline to reach its target of over 50 percent of Hochtief, but analysts said the Spanish group might want to raise its stake close to its target so as to take control of the German builder at its annual shareholders meeting on May 12.
"The priorities of ACS now will be to get to over 50 percent of Hochtief, move on with its asset sales, such as its renewable energy and electricity transmission divestments," Caja Madrid analyst Rafael Fernandez de Heredia said.
ACS wants to increase its control over Hochtief and Spanish utility Iberdrola, where it holds over 20 percent, to relieve pressures from its over 9 billion euro ($12.40 billion) debt pile and diversify away from Spain's struggling construction and property sectors.
The Spanish builder's net debt to core profit ratio would be considerably reduced by fully consolidating Hochtief -- which had net debt of about 700 million euros in September -- as well as being able to consolidate its 20 percent stake in Iberdrola through the equity accounting method.
Meanwhile, ACS' biggest shareholder Corp Alba said on Wednesday it was selling 5 percent of the company, taking advantage of a recent rally in the group's share price.
The stake was placed on Thursday through accelerated bookbuilding at 34 euros per share, a 9 percent discount to Wednesday's closing price.
At 1305 GMT, ACS was down 8.6 percent at 34.13, off a low of 33.45 on news of the placement.
HOCHTIEF MANAGEMENT BATTLES ON
Hochtief's CEO Herbert Luetkestratkoetter confirmed on Thursday he has appointed the banks to sell or list its concessions unit, which could raise hopes of a special dividend and the share price while ACS tries to hike its stake.
Financial sources told Reuters in mid-January that Hochtief wants to sell the business in the second quarter in an attempt to keep ACS at bay, but ACS could continue to sell non-core assets to make its final assault on Hochtief.
ACS has been building a war-chest to focus on expanding its control in Hochtief and Iberdrola. It reduced its stake in road company Abertis and sold its ports business in 2010, which together netted it about 2.5 billion euros.
The company said it is selling 1,757 megawatts of renewable energy assets and some power grid assets in 2011, and also has a commitment from its shareholders to hike capital by 50 percent if needed.
ACS has said it hopes to get 5 billion euros for the sale of the renewables assets, a valuation which could be stretched by recent cuts in renewables subsidies in Spain and elsewhere.
But is unlikely to fall below the less than 1 billion euros needed to take its Hochtief stake over 50 percent, at current prices.
Luetkestratkoetter said on a conference call that he is prepared to sit down and talk about an investor agreement with ACS, but he is not planning to step down from his position.
"We'll certainly discuss an investor agreement with ACS," said the CEO. "I cannot tell you more."
HOCHTIEF TARGETED BEFORE IBERDROLA
Iberdrola, ACS' other target, is fighting tooth and nail in the courts to prove that ACS is a direct competitor in a key business and should be denied the board seat.
Board representation would allow it to book 20 percent of Iberdrola's annual 3 billion euros of profits as its own.
Iberdrola has so far been successful in winning the court's backing that ACS's renewable energy and electrical engineering activities make it a direct competitor.
Although ACS is trying to debunk this argument by selling its renewable assets.
Analysts who asked not to be named said it makes more sense for ACS to focus its capital on building a stake in Hochtief, with the obvious improvement to ACS' gearing while fighting the battle for an Iberdrola boardseat in the courts. ($1=.7257 Euro) (Additional reporting by Andres Gonzalez, Greg Roumeliotis and Peter Dinkloh; Editing by Jon Loades-Carter)