The Spanish-controlled German construction group Hochtief is set to flout its long-standing governance agreement with Leighton Holdings, by inching its stake up to 54.96 per cent and announcing its intention to buy more shares.
In a letter to Leighton chairman Bob Humphris, Hochtief chief executive Marcelino Fernandez Verdes said his company had acquired 4.8 million shares and intended to acquire more "in the near term", without specifying the targeted stake.
Hochtief can acquire 3 per cent of Leighton every six months under Australian law.
The on-market share purchase signals an intention to break a non-binding corporate governance arrangement between Hochtief and Leighton, which specifies the German group will not increase its holdings above 55 per cent.
The agreement was reaffirmed in November 2010 when there was much consternation about the intentions of Spain's ACS as it launched a hostile takeover of Hochtief.
The latest revelations reignite concerns that ACS's original bid for Hochtief was to gain control of Leighton, the jewel in the German group's crown.
The debt-laden ACS has been selling assets, while Hochtief has struggled to grow amid the debt crisis consuming Europe.
In his letter to Leighton, Mr Fernandez Verdes said the acquisition of Leighton's shares was "consistent with Hochtief's stated position" as a long-term shareholder", and that it represented an "excellent investment".
Mr Humphris said Hochtief confirmed at a recent board meeting that it continued to support the independence of Leighton's board.
In March, Leighton's former chairman Stephen Johns and two independent directors, Wayne Osborn and Ian Macfarlane, quit in anger over perceived interference from Hochtief in the appointment of a new independent director and a broader "breakdown in relations with the major shareholder".
Leighton's shares closed at $15.45 on Friday, and are down 36 per cent since February.