SYDNEY, Feb 28 (Reuters) - BGC, one of Australia’s biggest privately owned companies, said on Thursday it has pulled the sale of its large stable of construction businesses due to weakness in Australia’s once-booming housing market.
The 59-year old firm, formerly Buckeridge Group, hired Macquarie Group Ltd to find a buyer last year for a sale that local media reported would be worth about A$2 billion.
But after a review amidst Australia’s sharpest property downturn in a generation, the board decided to halt the process and Macquarie recommended to proceed only with the possible sale or divestment of its contracting business, which includes mining maintenance and construction units, Chairman Neil Hamilton said.
“This is not a market in which anything near optimal valuation could be considered, so we are just turning it off and getting on with running the business,” Hamilton told reporters on a call. “In a reasonable market, we will revisit the motion.”
BGC was entirely owned by founder Leonard Buckeridge since its establishment in 1960, and came to dominate residential and commercial construction in Western Australia state.
After Buckeridge died in 2014, the company passed to his family. The family wanted to sell the businesses to execute Buckeridge’s will, and asked the investment bank to help with that process, Hamilton said.
Its business units span residential and commercial construction, building products, contract mining, engineering and property management, and generate over A$2.5 billion ($1.79 billion) in revenue, the company has said.
BGC still expects to sell non-core property assets, including buildings in the central business district as well as suburban buildings worth “many hundreds of millions”, Hamilton said.
($1 = 1.4004 Australian dollars)
Reporting by Paulina Duran; Editing by Christopher Cushing