The company, founded by Dick Dusseldorf as the Civil and Civic building company in 1952, was acquired by Lendlease in 1961 and has been trading on the Australian Stock Exchange since 1962. Its mantra of growth, performance and no nasty surprises made it a top 10 company with “bulletproof” earnings and 25 consecutive years of profit growth. That hard-earned reputation was undermined by its growing complexity and shares gradually fell from a 1999 high of $23.67.

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Its stock was trading about 10 per cent higher following Lombardo’s announcement on Monday, closing at $6.34, although they fell slightly on Tuesday, by 1.8 per cent. A month ago, they were as low as $5.89.

Citi analysts said the new strategy should leave Lendlease looking in much better shape with significant value upside. “We estimate potential for the share to re-rate to about $8 per share on successful execution of asset sales. However, the complex nature of closing out of businesses will lead to investors being cautious near term,” the broking firm said.

Investment house Macquarie said the restructure would create a simpler business model, but warned the divestments of large overseas assets with limited impairments would be a key hurdle.

After the sale of its global assets, Lendlease will focus on fund management and developing big property projects with about 75 per cent of its working capital in Australia. It has a number of major projects under way in Australia, including Melbourne Quarter and Queen Victoria Market and the One Circular Quay towers in Sydney.

The company warned it would write down up to $1.5 billion doing the restructure, but said it would target an initial $500 million share buyback from the sale proceeds, with more likely to come later.

“Not much activity may be seen on the buyback near term,” said City analysts, given the long-dated timing on some of the asset sales.

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