Lendlease sale needs to happen quickly, boss admits, as buyers begin to make inquiries about contractor

Around five firms have expressed interest in buying Lendlease, the boss of its up-for-sale construction business has told Building.

The firm’s Australian owner has yet to put together a vendor’s pack for would-be buyers but construction managing director Simon Gorski said this would happen “soon”.

Gorski, who admitted he was told the business was being sold a day or so before the news became public, admitted that a sale needed to happen quickly.

“We need to do it at pace,” he said. “We need to move quickly and diligently. We don’t want an extended period of uncertainty. It won’t drag on.”

Lendlease put the business up for sale at the end of last month, bringing to an end a 25-year ownership which began in 1999 when the firm paid £285m for the then Bovis which had been owned for a quarter of a century by shipping business P&O.

Gorski said would-be buyers could include a trade sale, private equity – or a team led by its current management.

“I’m ruling nothing in or out. There have been expressions [of interest]. International firms, some not necessarily construction firms.”

Group chief executive Tony Lombardo flew into the UK from Australia for two days last week to meet staff and several clients with the ultimate decision of who Lendlease sells to due to be taken by Lombardo and his executive team. But Gorski, who has been at Lendlease 20 years, added: “It has to be a collegiate decision for it to work.”

He dismissed some industry suggestions the firm could disappear. “It’s a brilliant, long-standing business with a great heritage. I don’t think it won’t ever exist.”

>> Also read our full analysis: ‘I’m at a loss about what to make of it all’ – Will Lendlease disappear from UK construction, and what would that say about the state of the sector?

He said he has been in touch with the firm’s clients on its existing jobs – which include the Google headquarters building at King’s Cross, its scheme on London’s Oxford Street to turn a former Debenhams store into mixed-use and the Manchester Town Hall refurbishment – to reassure them about its commitment to them.

But he conceded “one of two clients might pause” offering them new jobs while a buyer is found.

Building has spoken to several who have said they will not give Lendlease new work while it is up for sale. “I would love to but I would have to say no right now,” one told Building yesterday.

Gorski said he was holding regular meetings with his 700 staff with worries some will jump ship rather than hang on to see who the firm’s new owner might be, with rivals reporting that Lendlease CVs are already starting to appear in the marketplace.

“I need to make sure they feel connected with the business,” Gorski said, “and what it’s going to become. What have [they] got to lose by staying?”

Another client told Building that hanging on to people was key. “The biggest difficultly for them is holding on to staff. If in six months there is interest but no one is willing to make an offer, staff will say bye-bye.”

This week it emerged that its head of people, Shaina Kotecha, is leaving this autumn after more than 17 years at the business, having officially stepped down as a director last Friday.

A spokesperson said: “We can confirm that the chief people officer for our European business will be leaving later this year. Over nearly 18 years with the business, Shaina has been instrumental in the development of our leadership and talent. We deeply appreciate the significant contribution Shaina’s made and wish her all the best with her future endeavours.”

Lendlease is selling its US east coast operations to US construction firm Consigli Construction as part of the group’s decision to pull out of overseas work although Gorski conceded this deal had been in train for some time.

“The process [to sell UK construction] hasn’t got going yet but Lendlease have got huge amounts of experience divesting businesses,” he added.

Meanwhile, Lendlease has said it is not quitting its UK developments business but is instead lowering the investment it has in its existing schemes to a maximum of 25% with the remainder being taken over by other investors and funders. The firm, nonetheless, is scaling back the business and will not take on any new developments.

Its developments business in the UK includes the mixed-use Smithfield scheme in Birmingham and the Elephant Park residential job in south London.