The hopes of Multiplex securing a slice of the £4 billion construction brief for the London 2012 Olympic project may well have been dashed with sellout by the Reuben brothers of their 50% interest to Westfield yesterday.
Yesterday, Westfield paid £140 million ($A347 million) for the Reuben brothers’ 50% stake and English firm Stanhope’s 25% stake in Stratford City development.
The sell out by the Reuben Brothers and Stanhope means Multiplex is now highly unlikely to get the construction job for Stratford City.
In February this year, Multiplex sold its 25% share in Stratford City for £100 million to the Reuben brothers. The sale contract had a clause if the Reuben brothers successfully bought Westfield, Multiplex would be automatically awarded the construction job.
In November 2004, Multiplex acquired a 25% indirect interest in Stratford City for £146.25 million as part of the £585 million Duelguide/Chesfield bid with Westfield and the Reuben brothers.
Stratford City is a £4 billion project and is adjacent to the site for the 2012 London Olympic Games.
Much of the Olympic Village will be developed as part of the Stratford City site and will later be sold as residential units following the games.
The site has planning approval for 13 million sq ft of mixed use development, including 2 million sq ft of retail.
It is believed that a Bovis Lend Lease led consortium has been short listed for the infrastructure construction of the 2012 London Olympics.
The Legacy consortium comprised of Bovis Lend Lease, Capita Symonds and KBR was among four groups selected from over 80 contenders by the Olympic Delivery Authority.
Also in the running are Bechtel, CLM a Mace, Laing O’Rourke and CH2M Hill International joint venture and G3 a consortium of Amec, Balfour Beatty and Jacobs.
Yesterday, Westfield’s UK managing director Michael Gutman said the group was pleased that the satisfactory resolution of the shareholding arrangements for the Stratford project and would allow it to make a positive contribution to the timely delivery of an important element of the Olympic site, and carry forward the important regeneration of Stratford City.
Westfield’s buyout was a result of the London & Continental Railways threat to fire the Westfield, Reuben brothers and Stanhope joint venture.
In April, LCR sent the parties a letter ordering them to resolve the conflict within 42 days.
LCR said Westfield and the Reuben brothers were causing delays because of their conflicting views over who should have control over the project and who should buyout Stanhope’s stake.
The parties later entered into mediation.
“Westfield acknowledged the difficult decision that was required from its fellow shareholders in Stratford City to exit the project for the good of the scheme and the London 2012 Olympics.
““We appreciate and acknowledge the contribution of the Reuben brothers facilitating this agreement. We recognise how enthusiastic they have been to make sure the project is on time and they have put the interest of the London Olympics ahead of any other considerations.” Gutman added.
“We are pleased that the ownership issues within SCDL have finally been resolved. Our priority has always been the delivery of the Stratford City project and the Olympic facilities that it incorporates.” LCR stations and property division’s managing director Stephen Jordan said.
LCR spokesman Ben Ruse said the key thing is that while there’s relief that the ownership issue has finally been resolved, Westfield’s attention must now turn quickly to the project itself.
“Stratford City is one of Europe’s biggest single regeneration schemes and London & Continental Railways, who own the land, must have certainly and surity as to how the multi-billion pound, mixed-use project will be delivered,” he concluded.
The Reuben brothers, who own Aldersgate, said they wished Westfield every success with the project.
“We would love to have been the developer but we have stepped aside in the greater interest of a really successful 2012 London Olympic games.”
Progress on the plans for Stratford City and the associated Olympic infrastructure – the revisions to the section 73 residential allocation in Stratford City Zone 1 have already been submitted and the revised masterplan is expected to go before Newham Planning Committee in two weeks.
Apart from Stratford in East London, Westfield has nine projects across the UK at Belfast, Lisburn, Bradford, Derby, Nottingham, West Midlands, White City / West London, Guildford, Turnbridge Wells.
Westfield shares closed 26 lower at $17 and Multiplex shares closed 4 cents higher at $3.59.
By Nelson Yap
