Corporate doctor flies Fletcher coop

By DITA DE BONI

Friction between prospective directors and a new chief executive is thought to be behind yesterday's shock resignation of Alexander Toldte, the man appointed to lead Fletcher Building's stab at independence.

The widely experienced corporate doctor has spurned Building's top job for "other interests and opportunities," leaving commentators wondering how appetising Fletcher's plans to reform its remaining businesses really are.

The conglomerate said that while a disappointment, Mr Toldte's change of heart would not prevent it establishing a "strong and independent future" for Building.

But the move has come as a shock to most, including many within Fletcher. The company arranged meet-and-greet sessions between Mr Toldte and business media only two weeks ago. Michael Andrews has been made chief executive until a replacement is found.

Neither Mr Toldte nor Fletcher chairman Rod Deane was talking to the media yesterday.

Sources close to the company have told the Business Herald that friction between some members of Building's soon-to-be-appointed board of directors and Mr Toldte was behind his decision.

The board has not been named yet, but is thought to comprise long-time associates of the company.

It is understood Mr Toldte's plans for reforming the division caused disquiet among members of the "old guard." Those plans included a better return for shareholders, improved cashflow and a disciplined approach to asset disposal.

Mr Toldte was also reviewing all senior management positions and had indicated a change in both staff and culture in the division.

His plans for the company met widespread approval from brokers, with ABN Ambro upgrading its recommendation of Building stock to a "buy" after a meeting with him in December.

One of their few reservations remained appointments to the board, and whether they would allow Mr Toldte the freedom to implement his new strategy.

German-born Mr Toldte was seconded from Fletcher Paper to Fletcher Building in October last year, after helping usher in the $5 billion takeover of Paper by Norway's Norske Skog.

His Building appointment - part of the carve-up of the Fletcher conglomerate - was a popular one, many commentators believing he was the key to unlocking wealth from the division's diverse portfolio.

Building shares have slumped with news of Mr Toldte's exit. The previously buoyant stock tumbled more than 10 per cent from a high of $2.35 to a low of $2.12, ending 14c down at yesterday's close on $2.14.

Some analysts the Business Herald contacted offered another possibility - that Building was so ripe for takeover that Mr Toldte would not have had time to stamp his mark on the division and decided to pursue other positions.

"There is nothing to stop someone taking the division over," one analyst said.

Others felt the departure was ominous for Fletcher, with Mr Toldte's disregard for the sacred cows of the business now neutralised.

"It's a slight disappointment for the market. He was pretty well known and well regarded," said Ian Arkle, investment analyst at Guardian Trust.

But Shane Solly of Armstrong Jones said that while Mr Toldte's departure would slow the process of restructuring Building, it would not slow separation and did not change the resolve of the board to reform the business.