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.
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)
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