Bullish Sign? - Bounced off 200 EMA, page-2682

Lendlease ..one of the parties flagged earlier as possibly being interested in BGC is probably (definitely?) not interested
Business News reported https://www.businessnews.com.au/article/Lendlease-to-sell-engineering-arm it already did a $350 million write down on that arm and on February 25 and was needing to spend $450-$550 million to restructure the business

Scott McDknald ,of the Australian Budiness Review, said yesterday : (March 6, 2019)
https://www.theaustralian.com.au/bu...s/news-story/5d79a441ba8c8c9070def7c30ad236a0


“Lendlease’s engineering arm on Chinese buyers’ radar despite its woes:”



The NorthConnex road tunnel project in Sydney is one of Lendleases’ largest. Picture by Ryan Osland


The sale of Lendlease’s troubled engineering and services businesses is already emerging on the radar of overseas buyers as they try to replicate the successful international deals in the sector in the past few years.

DataRoom understands the China State Construction and Engineering Company (CSCEC) is running the ruler over the business and could be considered a front runner in the early stages of a sale.

Lendlease has Gresham trying to find a buyer for the business which in the first half of the company’s financial year recorded a $473.7 million loss.

Investment bankers and advisers are similarly scrambling to find a buy side role and locate a potential purchaser.

Critics say the engineering and services unit should have been cut free from Lendlease long before it became such a drag on the company’s overall earnings.

Observers say the successful transition of Leighton into CIMIC and then the purchase of John Holland by the China Communications Construction Company for $1.15 billion are blueprints for a deal in this situation.

If that’s the case then Lendlease will be hoping the Chinese approach this asset with the same fervour as it did with John Holland. It’s understood that CCCC outbid its nearest rival for the asset by more than $200m.

However, DataRoom has been told that one hurdle that CSCEC could face in its bid to buy the Lendlease asset is the central Chinese government’s appetite to have two of its biggest construction companies competing against each other in the same market in Australia.

Given the engineering business is currently dragging down Lendlease’s total earnings, the question of what price tag should be applied is going to be watched closely during the sales process. Observers say an earnings multiple of seven to eight times would most likely be put in place, given the size of the business.

Lendlease said in its result announcement recently that the engineering division had $5bn worth of “backlog revenue” and had secured $2bn in new work.

The revenue hit won’t be enough to offset the problems already existing in the business.”

SCOTT MURDOCH
JOURNALIST
Scott Murdoch is The Australian’s Data Room co-editor and has been a journalist for 20 years. He is a former China Correspondent for the newspaper and was based in Beijing for more than three years. Scott has p... Read more