Japanese takeover looms for real estate group Lendlease

A major Japanese company is reported to be considering a takeover of the $7.21 billion real estate and construction group Lendlease.

The Australian reported it was a takeover target, with shares rising in early trade this morning by almost nine percent to $13.97.

The shares fell back to $13.55 after the company responded at 11am with "Lend Lease notes speculation in today's The Australian regarding potential corporate activity."

"Lend Lease confirms it has not received any such approach."

According to the report, a major Japanese company, suspected to be Mitsui, was believed to be plotting an acquisition of the company.

The Japanese company is rumoured to be interested in acquiring the company and then breaking it up and offloading different parts to other suitors.

Last month Lend Lease was dubbed an "underperforming large cap property stock" by JP Morgan which flagged them as potential takeover targets.

Lendlease was hit hard on a profit warning late last year due to issues with its engineering business.

The property and construction group is currently trying to sell its engineering arm.

Lend Lease faces a shareholder class action lawsuit relating to its shock profit downgrade but JP Morgan doesn’t think this will be much of a deterrent to potential suitors.

Lendlease share price is trading lower than its 52-week high of $21.73.