Source: The Wall Street Journal                           Date: 13 April, 2011

The German construction company Hochtief AG issued a profit warning last week after its Australian unit Leighton Holdings Ltd. said it would review its outlook amid concerns that it may announce write-downs and a capital increase. The resultant drop in Hochtief's share price presents an opportunity for Actividades de Construcción y Servicios SA to increase its stake in the company, which for months has resisted the Spanish builder's unsolicited, hostile bid to compile a majority holding.

Previous profit warnings from Leighton in November and February had been played down by Hochtief, but last week the German company said it expected "significant adverse effects" on its own 2011 forecast. "There is no indication that Hochtief's forecasts for the business years 2012 and 2013 are affected," Hochtief said.

The announcement came after Leighton requested the Australian Stock Exchange halt trading in its shares, pending an update on its targets. The problems at Leighton come at an awkward time for Hochtief.  ACS, which aims to build a stake of more than 50% in Hochtief, raised its holding in the Essen-based company to about 41% at the end of March. Leighton's woes caused analysts to downgrade it, citing the possibility of write-downs and a capital increase.