New Zealand’s biggest builder on the auction block
Fletcher Construction, one of the largest listed companies in New Zealand, is understood to be up for sale following a profit warning and a slump in its share price.
The Auckland-based company announced in March that its full-year profit would be about $70m (NZ$100m) less than expected.
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This led to a 21% fall in the company’s share price, effectively reducing its listed value by about $1bn.
It prompted speculation in the Australian press that the company would become the latest Anzac contractor to be taken over.
Shares this morning were 27% down on the year so far, and their lowest for almost a year.
Fletcher’s troubles stem from problems with some large and complex construction projects coupled with a rapid rise in labour costs.
Fletcher shares began dropping in late February, when its construction division unexpectedly posted weak first half earnings, a slide that steepened after the profit warning.
Rumours of an impending sale appeared in the Australian Financial Review (AFR) yesterday. The paper’s Street Talk column reported that three Australian investment banks were competing to organise a sale.
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