News: UPDATE 1-Spanish-controlled contractor CIMIC to bid $400 mln for Australia's UGL

(Adds comments from CIMIC and UGL, shares)

SYDNEY, Oct 10 (Reuters) - Spanish-controlled engineering contractor CIMIC Group Ltd (CIM) said on Monday it will offer A$525 million ($400 million) for Australian rival UGL Ltd (UGL), seizing on the target company's shareprice collapse amid a mining downturn.

Sydney-listed CIMIC, mostly owned by Spanish-owned German company Hochtief AG , said it will offer A$3.15 per share for UGL, a 47 percent premium to its last close, but still less than half its A$7-plus levels in 2012 before the impact of a commodity downturn.

"CIMIC believes UGL's competencies are complementary to CIMIC's existing operations or enhance CIMIC's capabilities in new activities," CIMIC, formerly known as Leighton Holdings, said in a statement.

A UGL spokeswoman said the company had no immediate comment. The offer, a far cry from the target company's A$1.2 billion market capitalisation four years earlier, highlights the impact on the engineering sector of a downturn in mining due to weak commodity prices.

In June, UGL warned that delays at a large oil and gas project would hit profits, sending its shares down by a third in one day.

The company in August posted its second consecutive yearly loss, a A$106 million net loss compared to a loss of A$303 million the previous year, and said a restructure would see the company return to profitability.

On Monday, CIMIC said it planned to conduct its own review of UGL's buisnesses to "drive operational efficiencies and improvements to project delivery and analyse the composition and value of UGL's assets."

UGL shares were in a trading halt, having last traded at A$2.14.

($1 = 1.3187 Australian dollars)