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Company spotlight: Multiplex

FINANCE

EVEN in these times of high Government spending and low interest rates, floating a major contractor in the UK would be difficult, but Multiplex did just that in Australia.

In the year since floating, the shares have not let investors down.Can this continue as the firm spreads it tentacles ever further?

A recent note from Citigroup Smith Barney suggests the shares are up to 10 per cent overvalued.

Multiplex has changed from the family-controlled firm that built the Sydney Olympic stadium on time and to budget in the 1990s.

Another stadium - Wembley - provided the firm with a beachhead in Europe. Since then it has expanded into property.

This evolution into property and urban regeneration is one of the reasons that some analysts are concerned about the share price, yet Multiplex is unbowed and is studying its financial options.

A few big foreign contractors that operate in the UK such as Kajima of Japan and French giant Bouygues have a London listing and Multiplex could follow suit.

Some South African companies, fearing economic chaos after the end of apartheid, transferred their primary listing to London in the 1990s but Multiplex insists this possibility remains 'remote'and is 'not under consideration' What may deter Multiplex transferring shares to London is next year's court case with Cleveland Bridge, the steelwork contractor sacked by the Australians from Wembley.

Even if Wembley is completed to budget by next January's deadline, this may discourage potential buyers.