What has this story from Spain got to do with Leighton Holdings, the Australian construction and contracting giant that is back in the public eye?

Here’s a taste of that story:

“Real Madrid president Florentino Perez said on Wednesday that the Spanish club was terminating the position of director general, occupied by Jorge Valdano, to give coach Jose Mourinho more autonomy.

“I want to stress how painful the departure of Jorge Valdano is to me. We have travelled a long distance together,” he told a press conference.

“Valdano has had a rocky relationship with Mourinho but Perez dismissed media reports that the Portuguese coach had demanded the former Argentine international be dismissed as a condition for his staying on at the club.”

Valdano is a legend at Real Madrid where he played after being a part of the Argentine side that won the 1986 World Cup.

The man doing the sacking, Florentino Perez (worth more than a billion euros, according to media reports), controls big Spanish construction company ACS, that has stalked and is about to take control of Hochtief, which controls 54% of Leighton Holdings.

Leighton Holdings is stumbling, courtesy of a series of dumb deals and and profitless partnerships made under Wal King, Leighton’s former CEO, who had to be blasted out of the company last year by the board and chairman David Mortimer (who once stood up to and pushed Sir Peter Abeles out of TNT and then sold it to  Dutch company KPN).

Perez and  King are close. King didn’t get on with Hotchtief, who he apparently scorned. Now Perez is cleaning out those Germans at Hochtief who didn’t like King and the local money in Australia is that an advance on Leighton will follow, with King imposed on the company as chairman. That will see board members depart, a management upheaval and some big institutional shareholders upset.

That’s the way its done in Europe and especially in Spain.

For Perez, Leighton is a sideshow of sorts, his passion is Real Madrid, which again failed to beat hated foe Barcelona for the Spanish football title (And Barcelona beat Real in the European Cup and plays Manchester United  in the final early Sunday morning). He had headed the club twice and spent hundreds of millions of euros in both reigns trying to win titles and cups, to no avail. He  quit in 2006 when the cost got too much. He returned in 2009 and resumed the overpaying of players.

As a result, Real Madrid is heavily in debt to Spanish banks, as is ACS because it spent too much money in Spain’s housing boom and now has loads of losses. It bought shares in Hochtief in 2007 and then resumed its advance last year, but because it had no spare cash, was forced to offer its shares for those of Hochtief, whose only real asset was the stake in Leighton.

Leighton is therefore the only income-earning and profitable part of ACS-Hochtief and therefore more valuable than it seems here in Australia. But will Perez back his friend King’s return (and vindication) at the expense of possibly undermining the financial performance of Leighton?

Perez is impulsive and a big wheel in Spain, mostly because he sits at the top of Real Madrid, even though that is reputed to have close to €1 billion  of debt. He hasn’t let that faze him in sacking a man that has been a success for the club.

If he’s of a mind to, he will do the same with Leighton, with no regard to the consequences. He has the attitude of an old-fashioned Spanish conquistador, as does Wal King.