The focus for the new chairman of Lendlease is narrowing to former Mirvac Group chairman John Mulcahy.
Sources believe that at least one of the major shareholders supports the former Suncorp boss taking the position at the head of the board of Lendlease – the company Mr Mulcahy previously worked at.
Mr Mulcahy previously ran the Lendlease investment arm before the construction and property group sold wealth management business MLC to the NAB.
Meanwhile, although it is understood that the former Dexus boss Darren Steinberg was approached to take on the role, a source said he has passed up the opportunity.
The speculation comes with talk that the Lendlease chairman, Michael Ullmer, is set to step down as chair this month and Lendlease will update investors on its strategy on May 27.
It is believed that until at least February, the strategy of Lendlease under chief executive Tony Lombardo was to split out its poorly performing assets into a separate structure within the business and effectively places them into run-off or selldown mode.
Mr Lombardo continues to face pressure from activist investors over performance, including John Wylie’s Tanarra, Allan Gray and David Di Pilla’s HMC Capital.
It is believed who is best to run the business would be determined by the new chair.
The Lendlease share price, now at $6.12, has been trading at its lowest levels since 2009 and its market value is $4.2bn.
The shares traded at more than $20 in 2018.
Hurting the company has been tough industry conditions but also unprofitable development projects – particularly those offshore – as it looks to wind down construction in certain US markets and has sold assets to pay down its $2.4bn of debt and cut staff to slash costs.
Macquarie Capital, Morgan Stanley and Gresham are working on a plan to shape the company’s direction.
Lendlease builds large-scale projects, working on projects such as Sydney’s Barangaroo precinct, London’s Elephant Park urban renewal project, Singapore’s Paya Lebar Quarter and New York’s Claremont Hall, and it has a $103bn global development pipeline.
It has 47 developments globally and a construction business with an $8.3bn workbook.
It also has $48bn in funds and assets under management, including office, residential, retail, industrial and social infrastructure assets.
Its business is broken down into three reporting units: development, construction and investments.
It made a $136m loss for the six months to December.
Sims could reap windfall from land sales
Some in the market believe that Sims needs to put some more thought towards selling more assets.
Bids due for BGC building materials empire
The contest is well under way for parties to buy the $800m BGC building materials business based in Perth.