It turns out Downer is not the only embattled company that Brookfield has considered buying – Lendlease was on its hit list as well.
DataRoom understands that Brookfield carried out a detailed assessment of Lendlease several years ago for a buyout, but moved on when it considered a deal was too hard or not good value for money.
This column revealed that Brookfield also ran the ruler over engineering and services Downer in 2022 but then looked elsewhere for deals.
An interest in Lendlease makes sense, because of its expertise in real estate, construction (it owns builder Multiplex) and complex situations.
Brookfield’s management is considered top notch when it comes to stripping out costs and maximising performance.
But the fact that the Canadian private equity firm, considered the obvious buyer, has looked before and rejected a purchase suggests that the buyer universe for the $4bn Australian-listed business is even more limited than earlier thought, although, as widely known in the industry, Japanese suitors have looked under the hood.
As earlier reported by this column, Macquarie Capital is assessing strategic possibilities for Lendlease, with expectations growing of a retreat from its international operations after suggestions the construction unit could be sold (the latter is now seen as unlikely due to limited buyer interest).
But the smart money believes there’s no silver bullet to fixing Lendlease, with most of its parts fitting well together, and takes the view it simply needs to be run better, with a better cost structure and sharper approach.
Brookfield would provide the fresh set of eyes and unapologetic business style that successful North American operators are known for.
It’s worth remembering New Yorker and real estate heavy hitter Glenn Rufrano took the reins of troubled real estate group Centro during the Global Financial Crisis and made the hard decisions needed to rescue it after its near collapse.
Many believe the fact that he was not part of the Australian business fraternity was a huge advantage.
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