Sydney-based fund manager Ellerston Capital has amassed a 5 per cent stake on behalf of a secret investor in Fletcher Building - the New Zealand construction and materials company that Wesfarmers is said to be eyeing off.
Ellerston told the market on Monday morning it had a 5.15 per cent stake in Fletcher after buying a parcel of shares on Friday worth $9.4 million, tipping it over the 5 per cent threshold that requires disclosure.
Fletcher has a construction business, a materials arm, and a number of building supplies stores.
The fund manager has been buying Fletcher shares since early December, and has bought shares on nearly every trading day this month.
Ellerston said its stake of Fletcher shares, worth about $214 million at their current price, were "owned by third party account under the discretionary investment management of Ellerston Capital".
The news follows the revelation on Friday that Wesfarmers was looking at the downtrodden Fletcher as a possible growth vehicle, with sources close to the Australian conglomerate saying it had bought a 3 to 4 per cent stake in Fletcher.
Wesfarmers has declined to comment and Fletcher said it was not aware of any holding on their share register in Wesfarmers' name.
It is likely Wesfarmers would buy stock on an anonymous basis through a nominee entity. Fletcher's shares soared as much as 15 per cent on Friday off the back of the reports.
Wesfarmers has said it is looking for aquisitions, especially ones that will fit within its industrials division, as new managing director Rob Scott reshapes the group with the $18 billion spin-off of Coles, its largest business.
The group, which also own Bunnings, Kmart, Target and Officeworks, has said it wants to pursue ventures that will increase its rate of returns to shareholders.
The dual-listed Fletcher has been in strife over the past year, with its share price falling by about half, because of 14 construction projects that have run over time and over budget.
Market watchers have been split on whether Fletcher would be a good fit for Wesfarmers.