Abigroup Limited

This construction company has become the target of Germany's second largest construction group, Bilfinger Berger, with the announcement of a $186m takeover bid. An Australian subsidiary of the German company is offering $3.90 for each Abigroup share. The board of Abigroup is recommending shareholders accept the offer in the absence of a higher bid emerging. Similarly, Abigroup's largest shareholder Vercot Pty Ltd, with 50.24%, is intending to accept the offer. Vercot is partly owned by Abigroup's MD John Cassidy and CFO, Darrell Hendry. As a so-called 'sweetener' to the deal, Abigroup will pay a $0.10 special dividend to shareholders if the takeover offer goes unconditional. With the share price up 29% since issue 132/July 03 (Hold for the Upside - $3.08), we're recommending shareholders HOLD FOR THE UPSIDE given the chance of a higher bid emerging.