Australian listed groups Service Stream and CIMIC are believed to be the final parties doing battle to buy the Lendlease services business, with final bids due on Friday.
Downer and Australian engineering group Monadelphous now thought to be out of the race.
Morgan Stanley and Gresham are working on the sale.
Advisory firm Rothschild is believed to be aiding Service Stream, while CIMIC, which is looking at the business as an addition to its services operation UGL, is understood to be self-advised.
The Australian-listed Service Stream, with a market value of about $350m, provides integrated end-to-end asset life cycle services to utility and telecommunications owners, operators and regulators across Australia, specialising in the design, construction, operation and maintenance of the networks. It looked at the services business last time around when it was for sale in 2019 – now it is expected to reap a price of about $300m.
Lendlease moved to sell its services and engineering operations in 2019 after cost blowouts on projects.
At that time, it offered a pre-tax $500m provision for underperforming projects.
However, while it secured $160m for its engineering business from a sale to industry rival Acciona, it opted to retain the services operation.
At least one Chinese party was said to be vying for the unit.
Lendlease Services provides end-to-end solutions in asset creation, maintenance, management and delivery for Australia’s transport, water, power, telecommunications and industrial sectors, working on a major projects such as the National Broadband Network and the Loy Yang A Power station.
It inherited both the services and engineering businesses from the acquisition of Bilfinger Berger’s Australian construction and engineering business – renamed Valemus – more than a decade ago under former boss Steve McCann.
Mr McCann stepped down as head of Lendlease last month. The sale is the first major transaction under incoming leader Tony Lombardo, who was promoted into the top job.
With respect to mergers and acquisitions, Lendlease had earlier hired Morgan Stanley for a potential tilt at the $2bn portfolio of telecommunication towers on offer by Singtel’s Optus, but in recent weeks, it has dropped out of the Bank of America-run contest that is about to enter its second round.
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