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International DIY News

Wesfarmers rumoured to have acquired stake in Fletcher Building

Wesfarmers logo 725 x 500

Wesfarmers is understood to have purchased a stake of circa 3-4% in Fletcher Building, a New Zealand-based construction and industrial materials business.

Fletcher Building is one of the largest listed companies in New Zealand and is valued at approximately $4.1 billion (AUS).  The business offers building products under the brands Altus (aluminium), Australian Construction Products and Winstone Wallboards, as well as operating a number of retail chains, including Calder Stewart Roofing, PlaceMakers and Tradelink.

It is thought that Wesfarmers has acquired shares anonymously, through a nominee entity, as the group would not have to reveal itself as the owner until its shareholding exceeded 5%.  A spokeswoman for Fletcher said: "We are not aware of a shareholding in the name of Wesfarmers in Fletcher Building" while Wesfarmers declined to comment on the matter.

Wesfarmers is actively looking for acquisition opportunities and Fletcher represents an ideal target given its trading challenges in recent times.  It has suffered well-publicised losses on sixteen major building projects;  is currently talking to its lenders about new borrowing conditions and is considering selling assets as part of a business review.  Fletcher's share price has dropped by nearly half since January 2017 but was boosted by over 10% today, as the Wesfarmers rumour broke.

Fletcher's building and construction division reported losses of $631m in the first half of 2018.

Source : Insight DIY Team

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13 April 2018

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