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UPDATE 1-Hochtief to snub shareholder ACS at AGM

Published 03/31/2011, 11:18 AM
Updated 03/31/2011, 11:20 AM
HOTG
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* Hochtief to propose one new supervisory board member

* ACS wanted four new supervisory board seats

* One Qatar representative to be recommended

(Adds detail, background, AGM invitation)

FRANKFURT, March 31 (Reuters) - Hochtief's supervisory board is proposing no major changes to its composition, souring already strained relations with its shareholder ACS.

Sources told Reuters earlier this week that Spain's largest construction group ACS wants to double the number of its supervisory board seats at Hochtief to four, as it tightens its grip on its peer.

Eight seats on Hochtief's supervisory board representing shareholders are up for renewal at the company's annual shareholder meeting (AGM) on May 12.

According to the invitation to the group's annual general meeting (AGM) published on Thursday, the board has only suggested one new candidate for a position on the board even though ACS has increased its stake in the German group.

It also proposes to keep one representative of Qatar, which holds a 10 percent stake in the company.

A Germany-based spokeswoman for the Spanish company in Germany said Hochtief was "flouting the rights of a majority shareholder that are customary in the market".

Hochtief Chief Executive Herbert Luetkestratkoetter fiercely resisted a lowball bid by ACS last year aimed at enabling it to buy Hochtief shares in the open market.

ACS wants Hochtief, with its strong balance sheet and contracts, to help it diversify away from Spain's struggling construction sector.

"Judging by the number of shareholders who have attended Hochtief's AGMs in the past, it is unlikely that a majority of shareholders will be there to back Hochtief's interest," said a Frankfurt-based construction sector analyst, who declined to be named.

"I can't see ACS not getting its way," he added.

ACS currently holds 41 percent in Hochtief, the ACS spokeswoman told Reuters, adding that it aimed to hike its stake further ahead of the AGM.

It has said it aims to hold 51 percent in Hochtief.

(Reporting by Matthias Inverardi and Josie Cox; editing by Elaine Hardcastle)

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