Australia's BGC halts construction business sale amid cooling housing market
By Paulina Duran
SYDNEY, Feb 28 (Reuters) - BGC, one of Australia's biggest
privately owned companies, said on Thursday it has pulled the
sale of its large stable of construction businesses due to
weakness in Australia's once-booming housing market.
The 59-year old firm, formerly Buckeridge Group, hired
Macquarie Group Ltd to find a buyer last year for a
sale that local media reported would be worth about A$2 billion.
But after a review amidst Australia's sharpest property
downturn in a generation, the board decided to halt the process
and Macquarie recommended to proceed only with the possible sale
or divestment of its contracting business, which includes mining
maintenance and construction units, Chairman Neil Hamilton said.
"This is not a market in which anything near optimal
valuation could be considered, so we are just turning it off and
getting on with running the business," Hamilton told reporters
on a call. "In a reasonable market, we will revisit the motion."
BGC was entirely owned by founder Leonard Buckeridge since
its establishment in 1960, and came to dominate residential and
commercial construction in Western Australia state.
After Buckeridge died in 2014, the company passed to his
family. The family wanted to sell the businesses to execute
Buckeridge's will, and asked the investment bank to help with
that process, Hamilton said.
Its business units span residential and commercial
construction, building products, contract mining, engineering
and property management, and generate over A$2.5 billion ($1.79
billion) in revenue, the company has said.
BGC still expects to sell non-core property assets,
including buildings in the central business district as well as
suburban buildings worth "many hundreds of millions", Hamilton
($1 = 1.4004 Australian dollars)
(Reporting by Paulina Duran; Editing by Christopher Cushing)
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.