April 15, 2018 / 10:47 PM / in 6 months

Australian investment firm Ellerston acquires 5.1 percent stake in New Zealand's Fletcher Building

WELLINGTON (Reuters) - Australian investment management firm Ellerston Capital has acquired a 5.1 percent stake in New Zealand’s largest construction firm Fletcher Building Ltd (FBU.NZ), the builder said in a release to the stock exchange on Monday.

Sydney-based Ellerston Capital did not immediately respond to a request for comment on who it bought the stake on behalf of.

Shares in Fletcher rose 2.52 percent to NZ$6.50 when the New Zealand stock exchanged opened.

That followed a huge rally on Friday which saw shares rise at their sharpest rate in almost 20 years following speculation that the embattled builder could be the target of a takeover by international investors.

The rally had been prompted by a Sydney Morning Herald report, citing unnamed sources, that Australian conglomerate Wesfarmers had bought a 3 to 4 percent stake in the builder, whose share prices had been eroded in the past year by a series of blow outs in its commercial construction unit.

Reporting by Charlotte Greenfield; Editing by Daniel Wallis

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