Another Fletcher leaves the flock

By ANNE GIBSON property editor

This week's corporate tussle over the ownership of Fletcher Energy has made a Cinderella of Fletcher Building, whose fate was sealed in a less spectacular way at Tuesday's shareholder meeting in Auckland.

As the Royal Dutch Shell/Apache versus Peak Petroleum match was played out, few people noticed that Fletcher Building's future was also hanging in the balance, along with that of Fletcher Forests.

In the end, shareholders voted in favour of dismantling the Fletcher Challenge conglomerate.

The largest part of Fletcher Challenge - Fletcher Paper - is long gone, havinf been sold to Norske Skog last year.

FCL Energy, with a market capitalisation of more than $3.3 billion, is the giant of the three remaining divisions, followed by FCL Forests at more than $800 million and FCL Building at more than $677 million.

For FCL Building, the vote means an entirely new direction, away from the parent company and out alone on to the New Zealand, Australian and New York stock exchanges.

The new entity will trade on the NYSE from March 26, according to a memorandum sent to shareholders this year.

The split means Fletcher Challenge Building will be renamed as Fletcher Building Ltd.

But who will lead the new entity is yet to be decided. German-born Alexander Toldte, seconded from FCL Paper to FCL Building in October after assisting in the $5 billion Norwegian takeover, spurned the position in late January.

ABN Ambro upgraded its recommendation to buy FCL Building stock after meeting Toldte in December.

His appointment was viewed as a key to eventually unlocking the wealth from FCL Building's diverse portfolio.

But early this year, he announced he wanted to pursue "other interests and opportunities," leaving commentators wondering about possible friction between some members of FCL Building's staff and Toldte.

Until a new chief executive is found, Michael Andrews is sitting in as FCL Building's interim CEO.

This week's shareholder vote has set up the chance that some assets or divisions of FCL Building containing market leaders in various sectors highly attractive to Australian and Asian investors could be sold.

An announcement on the new direction is due late next month after a review of major assets and properties.

Although FCL Building is a $677 million company, it is also a complicated group of disparate property-related interests.

Started at the turn of last century by Scottish immigrant Sir James Fletcher, its wealth was partly founded on building state houses. Today the company includes the Placemakers DIY chain and Fletcher Construction, currently building the 34-storey $171 million PricewaterhouseCoopers Tower by AMP on Auckland's waterfront.

FCL Building has 7400 employees in 40 businesses.

These span hardware stores, shingle quarries, construction firms, wallboard manufacturers and Hire A Hubby.

The company has investments in Peru, Bolivia, India, Australia and Fiji.

But it has pulled back from what Fletcher Construction's communications executive, Peter Cowey, fondly calls "our inter-galactic" phase, referring to the heady days when FCL Building was constructing the $2.2 billion Getty Museum in Los Angeles and doing the steel work on the astonishing sail-shaped Burj Al-Arab hotel in Dubai.

Links:

www.fletcherbuilding.co.nz