UGL SHARES SURGE AFTER $524 MILLION CIMIC OFFER

UGL SHARES SURGE AFTER $524 MILLION CIMIC OFFER

CONSTRUCTION giant CIMIC has launched a $524 million takeover bid for rival engineering contractor UGL, seizing on the company's falling share price amidst the mining industry slump.

CIMIC (CIM) - which secured a 14 per cent stake in Sydney-based UGL (UGL) early Monday morning - announced it will make a final unconditional offer of $3.15 per share, a 47 per cent premium on the group's last traded price of $2.14.

Should the takeover be successful, the suitor plans to delist UGL from the ASX and reconstitute its board.

In a statement to shareholders, CIMIC, formerly Leighton Holdings, says it "believes UGL's competencies are complementary to its existing operations or will enhance its capabilities to new activities."

It says it is confident of regulatory approval, with the offer already sanctioned by the Foreign Investment Review Board and the Australian Competition and Consumer Commission indicating a public review will not be required.

The move is the most recent in a string of hostile takeovers by the company, with attempts already made earlier this year to seize full ownership of property developer Devine and engineering contractors Sedgman and Macmahon.

UGL has advised investors to take no action until its board can convene to consider the offer and provide advice.

The group has long been the subject of takeover rumours, with media claims suggesting last year that rivals Downer EDI and Transfield Services were considering offers. It took a beating from investors in early June when management warned of potential contract losses worth $200 million from its Ichthys liquefied natural gas plant project.

UGL share prices leapt 48.6 per cent to $3.17 on the offer in midday trade, its highest price since June and its largest one-day jump since listing on the ASX in 1994.

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