Is the CIMIC buyback a takeover in disguise?

Yesterday CIMIC Group (ASX: CIM) – the company formerly known as Leighton Holdings – announced a share buyback. The company has authorised broker Merrill Lynch to buy back up to 10% of its shares on-market over the next 12 months.The rationale, according to the ASX announcement, is that the buyback ‘signals the Company’s belief that the current share price is attractive’.Not mentioned – but perhaps more important – is that Hochtief’s current 70% shareholding in CIMIC will rise to 77% if the 10% buyback is completed. In fact, let’s call the buyback for what it is: a takeover by stealth.Management...

Yesterday CIMIC Group (ASX: CIM) – the company formerly known as Leighton Holdings – announced a share buyback. The company has authorised broker Merrill Lynch to buy back up to 10% of its shares on-market over the next 12 months.

The rationale, according to the ASX announcement, is that the buyback ‘signals the Company’s belief that the current share price is attractive’.

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