Spanish-controlled CIMIC Group (the former Leighton Holdings) has revealed it is on the verge of selling a 50% stake in its Thiess contracting business to the aggressive UK/US hedge fund, Elliott Advisors for an as yet unrevealed amount.
In a short statement to the ASX yesterday CIMIC said it has signed “an exclusivity agreement and is in advanced negotiations with funds advised by Elliott Advisors (UK) Limited regarding the potential investment by Elliott into 50% of the share capital of Thiess, the world’s largest mining services provider, which would provide joint control of Thiess to CIMIC and Elliott.”
“The introduction of an equity partner into Thiess would capitalise on the robust outlook for the mining sector and provide capital for Thiess’ continued growth while enabling CIMIC to maintain its strong balance sheet,” CIMIC said in the ASX statement.
CIMIC said expects that the advanced negotiations will conclude in the coming weeks with a share purchase agreement that will be subject to customary conditions including all regulatory approvals.
Thiess has a portfolio of mining services contracts, including at BHP Mitsubishi Alliance’s Peak Downs and Caval Ridge coal mines in Queensland, OZ Minerals’ Prominent Hill copper-gold mine in South Australia and Glencore’s Mt Owen coal mine in NSW.
Elliott Management had $US40.2 billion ($A56.2 billion) in assets as of December last year.
It is most notable for trying to greenmail BHP into consolidating its listings into one based in the UK instead of the present dual structure of listing in London and on the ASX.
It also pressured BHP to look at selling assets and its pressure came as the company was heading towards selling its US shale oil and gas business at the right time – in 2018 at the peak of the market.
CIMIC shares rose 0.3% to $22.41 yesterday.
CIMIC is not the only company looking to lessen its exposure to mining services. Downer EDI is looking to sell its extensive contract mining and services business as well.