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Fletcher Building Limited cools Wesfarmers Ltd takeover talk

Wesfarmers Ltd (ASX: WES) have confirmed that they do not hold any shares in Fletcher Building Limited (ASX: FBU), New Zealand’s largest building materials company.

This is according to an announcement made my Fletcher Building today, following recent media speculation about a potential takeover.

Fletcher Building also announced plans for a NZ$750 million capital raise that will be underwritten by Macquarie Group Ltd (ASX: MQG).

I think the announcement is good news for Wesfarmers shareholders who will not want to add to their portfolio the complexity of a company that is going through a major restructuring.

Fletcher Building shareholders will also find positives in a stronger balance sheet for the company, although that will come at a cost of dilution of their equity should they not participate in the capital raise.

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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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