Nick MathiasonSunday March 26, 2006The ObserverThe billionaire...

Nick Mathiason
Sunday March 26, 2006
The Observer


The billionaire Reuben brothers have loaned millions of pounds to
Multiplex, the troubled Australian construction company that is
building the new Wembley Stadium.
The loan will concern both the Football Association and investors in
the quoted firm, who fear the building giant may be in financial
difficulties. Multiplex has admitted that failing to deliver Wembley
Stadium on time could cost it £183m.

The Observer has learnt that the Reubens lent a substantial sum of
money to Multiplex as part of a deal last December which saw the
Australian firm sell its 25 per cent interest in Stratford City - a
key 73-hectare site that will be part of the London Olympic Games
complex in 2012.

A Multiplex spokesman said: 'There's no denying that if you book this
big a loss on Wembley, it's a matter of concern, but the Multiplex
group is very strong. It's backed by a lot of capital and is
essentially in a strong position because of the Australian exposure.
If you look at how the shares have traded, they have not collapsed.
Multiplex is not in danger of going under.'

It has also emerged that Multiplex's sale of its stake in Stratford
entails pre-emption rights that would allow it to develop large chunks
of one of the biggest regeneration projects in Britain. It still
retains a partnership with the Reuben brothers at Stratford.

'This will infuriate the government,' commented a source close to the
deal. 'They won't let that happen.'

There is already a furious row between the remaining Stratford
consortium members - the Reubens, Westfield and Sir Stuart Lipton -
who are in the throes of an acrimonious financial break-up. A
settlement was expected this week but feelings are running so high
that an agreement is now not expected for two weeks at least.

The row has embroiled London Mayor Ken Livingstone, who is set against
the Reuben brothers controlling the site. He wants the Australian
shopping centre developer Westfield to triumph. Lipton has agreed to
sell his stake to the winner in a move which he hopes will reduce
tensions.

Multiplex, meanwhile, has been widely blamed for causing the delay of
the £757m Wembley Stadium project. The Australian firm was built up by
John Roberts, but it was his son, Andrew, who persuaded him to expand
aggressively into Britain five years ago. The move has been a
financial disaster, provoking a seething family feud.

Two years ago Multiplex became the second-largest property developer
in Britain. The company believed it could reinvent construction by
being not only a developer but also a builder and investor. It is now
looking to sell many of its UK holdings.