Westfield shares were placed in a trading halt yesterday ahead of an announcement today that will see the company’s Australian operations split from the rest of the business.
Media reports say Westfield yesterday began telling big investors of its plans for the creation of a company called Westfield Retail.
News of the split and proposed issue leaked into the market yesterday, forcing the company to ask for a suspension of trading.
The spin-off will raise up to $3.5 billion through the issue of new shares and is expected to have $9 billion of assets.
The reports claim, as they always do when Westfield makes a big announcement that deal is aimed at unleashing value for group and give it more flexibility for further expansion.
The equity raising will be led by Morgan Stanley, Citigroup and Credit Suisse.
Morgan Stanley is advising the company on the deal, which will be by way of distribution to shareholders of 50% of the well performing Australian assets with the parent company to own the other 50%.
Westfield requested the trading halt after speculation in the media about potential transactions involving the company leaked into the market.
The Australian Stock Exchange said Westfield securities would remain in a trading halt until the start of business on Thursday, November 4 or when the announcement is released to the market.
Westfield shares were up 24c, or 1.9%, at $12.81 before trading was halted.
Air reported last week that the Financial Times had reported (and Westfield was not queried by the ASX or ASIC) that Westfield was planning the sale of a substantial stake in its new London shopping mall near the 2012 games site for 750 million pounds, or around $A1.2 billion.
That deal would see up 40% or a bit more sold to a small group of large investors who would become shareholders in the centre via an investment trust.
Yesterday’s media and market reports claimed one of the reasons Westfield was looking to split the business was to give it the freedom to buy some of the $4.5 billion of assets Centro will be selling.
Westfield has 119 centres, of which 44 centres are located in Australia, valued at $22 billion.
The rest are located mostly in the US, Britain and New Zealand.
Last week, Westfield opened the first stage of its $1.2 billion Sydney Westfield project.
There has been media speculation that like the London project, part of the new Sydney centre could be on the market.
The group last came to the market in February last year when it raised $2.9 billion at $10.50 per unit, which was a discount of more than 10% to the then security price.
A similar issue today would see the issue priced around $11.50 to $11.60, based on yesterday’s close of $12.81.
