Leighton.

Troubled project pushed ACS-controlled Hochtief to take full control of its Australian business Leighton. Photo: Glenn Hunt

Leighton and Germany's Hochtief group agreed in 2000 that Hochtief would cap its stake in the Australian group at 55 per cent stake and hold a minority of board seats.

The Australian group said in 2010 that the agreement was being extended, but it was never legally binding, and by that time Spain's ACS was moving towards majority control of Hochtief.

It moved past 50 per cent in 2011, and from that moment Leighton's independence was doomed.

Hochtief forced a partial board spill at Leighton last year, and launched a bid that could boost its stake in Leighton from just under 59 per cent to just under 74 per cent on Monday. Thursday's announcements pre-empt the outcome of the bid, and confirm that ACS is in charge.

Leighton chief executive Hamish Tyrwhitt and chief financial officer Peter Gregg are stepping down, and Hochtief chief executive Marcelino Fernandez Verdes has taken over as CEO.

Another 2 Hochtief representatives have been appointed to the board, creating a 5-5 split between Hochtief representatives and independents, with ongoing independent chairman Robert Humphris holding a casting vote.

Hochtief will however soon have board control.

Independent directors Paula Dwyer, Russell Higgins and Vicki McFadden will resign by the conclusion of Leighton's May 19 annual meeting at the latest.

Hochtief has also agreed to sweeten its offer to acquire 3 out of every 8 outstanding shares in Leighton, from $22.15 a share to $22.50.

It's a very small increase to win the backing of the independents, but then again, ACS-Hochtief didn't actually have to do anything.

When it launched its bid on Monday it said that it intended to take control of Leighton regardless of the outcome of the offer.

The partial takeover bid is unsatisfactory but legal, and the independents were unable to persuade the German group to replace it with a full bid.  ACS wants to keep Leighton's Australian listing just as it has maintained Hochtief's listing in Germany. It also wants to limits its stake to 75 per cent to ensure that Leighton does not have to refinance debt facilities.

The independents would have had more leverage if Leighton had written an article into its constitution requiring shareholder approval of partial offers. It wasn't there, however, and that arguably reflects the underlying reality.

Companies that create rules requiring partial bids to be first approved by shareholders are seeking to head off the possibility that control will be acquired cheaply. In this case Hochtief already had latent control, and was in the process of activating it.

Strong profit performance underpinned Leighton's independence agreement with Hochtief for years. A string of project losses and governance lapses undermined Leighton's case for continued independence just as ACS was moving to control of Hochtief, however.

ACS may well have moved to take control of Hochtief's's Australian satellite anyway, but Leighton's problems made the push inevitable.