Australia's CIMIC to sell 50% of mining services business Thiess to Elliott

(Reuters) - CIMIC Group CIM.AX said on Monday it will sell half of its mining services business to activist hedge fund Elliott Management, valuing the unit Thiess at A$4.3 billion ($3.04 billion).

CIMIC, which will continue to hold the remaining 50% of Thiess, expects a pre-tax gain on the stake sale of around A$2.2 billion and a post-tax gain of around A$1.4 billion.

The deal would imply a 50% stake is worth a little over A$2 billion and includes an option for CIMIC to repurchase Elliott’s half of the world’s largest mining services provider within three to six years at a potentially lower price.

It will also beef up the Australian contractor’s balance sheet with cash of around A$1.7 billion to A$1.9 billion, CIMIC said.

Also in the agreement is an option for a potential initial public offering or a sale to a third party, it added.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Diane Craft and Daniel Wallis