Investors reward Fletcher Building

Friday 20th September 2002

The sharemarket yesterday gave an emphatic thumbs up to Fletcher Building's $754 million Australian acquisition, pushing the share price up by more than 6%.

A jubilant Fletcher Building chief executive Ralph Waters called the deal a masterstroke of timing. The company is buying wood panels and laminates maker the Laminex Group from Amatek Group, the company holding British private equity group CVC's Australian building products interests.

FBU's share price was suspended from trading on Tuesday ahead of the announcement while the company negotiated a 43.7 million share placement to institutions to part-fund the deal. The placement went out at $2.95, a 5% premium to Tuesday's closing price. In early trading yesterday the shares changed hands at $2.99. The deal took several months to negotiate and was the third offer Fletcher Building made.

It means New Zealand companies Fletcher Building and Carter Holt Harvey now have virtual dominance of the Australian bench top, particle board, and wood panels market.

Mr Waters said Laminex met three key criteria it was one or two in its industry, the industry structure was sound, and the buy wouldn't start a transtasman war. It also fits Fletcher Building's criteria of price and return.

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