Australian fund manager accumulates a 5.1% Fletcher Building stake

Hard on speculation that Wesfarmers has been buying Fletcher Building shares, a Sydney-based fund manager, Ellerston Capital, has told ASX that it has accumulated a 5.1% stake.

The notice shows Ellerston started buying Fletcher shares on December 4 last year through a number of nominees companies and that a $9.4 million purchase of 1.2m shares on Friday took it over the 5% threshold beyond which shareholders must disclose their presence.

Ellerston now owns nearly 35.8m shares, having spent nearly $230.5m or an average price of about $6.44 per share.

The shares closed at $A6.02 on the ASX on Friday, up 47c, or 8.5%, on the previous day after the Sydney Morning Herald reported Wesfarmers had built a 3-4% stake, which cited “some sources close to” Wesfarmers.

Fletcher shares bottomed on the ASX earlier this month at $A5.44, down 40% from early 2017 as the losses stemming from the company’s Building + Interiors unit from its high-rise construction projects mounted.

The known and expected B+I losses now total about $NZ700m.

Ellerston’s website says it has more than $5 billion in funds under management in a number of separately managed accounts, wholesale funds and retail offerings for a range of financial advisers, institutions and individual investors.

It specialises in “equity and alternative strategies” and “exploiting inefficiencies by identifying stocks that are temporarily misunderstood and fundamentally mispriced.”

The substantial shareholder notice shows the shares are owned by 150 different entities in countries including Australia, the US, Hong Kong, the Caymans and Jersey.

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