European Unibail Rodamco will buy Westfield for $US24.7 billion, or more than $A32 billion and create a global giant.
The deal which will see a $US 70 billion global retail giant formed (and rebadged under the red Westfield logo) shows no sign of any fears of the advance of the online world deeper into retailing, led by the likes of Amazon.
Unibail is the largest commercial property company in Europe and it said last night that Westfield shareholders would receive a combination of cash and Unibail shares.
The deal would value each Westfield share at $US7.55 (or $A10.01), representing a 18% premium to the stock’s closing price on Monday, and implies an enterprise value for Westfield of $US24.7 billion (including debt).
Chairman Sir Frank Lowy will retire from the company he co-founded in 1960, and his sons Steven and Peter, will retire from their positions as co-chief executives.
Westfield shares were placed in a trading halt on Tuesday ahead of the announcement.
Unibail Rodamco CEO Christophe Cuvillier said in a statement that "The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation. It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.
Westfield chair Sir Frank Lowy said: The transaction announced today is the culmination of the strategic journey Westfield has been on since its 2014 restructure. We see this transaction as highly compelling for Westfield’s security holders and Unibail-Rodamco’s shareholders alike. Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business.”
The combination of the retail property groups would create a global leader in the sector with 104 properties worth 61.1 billion euros. Westfield owns and operates 35 shopping centres in the United States and United Kingdom
Westfield securities were halted at Monday’s close of $8.50, down 9.2% year to date against a 4.7% rise in the ASX 200.
With a 10% stake in Westfield, the Lowy family will be paid around $A3 billion, give or take a few hundred million.
Scentre securities climbed 4.1% (it used to be the local arm of the Lowy empire), Dexus jumped 3.1%, Mirvac rose 2.9%, Vicinity Centres rose 2.5%, GPT climbed 2.4%.
Unibail-Rodamco said it had identified synergies worth 100 million euros per year and it expects the deal to add to earnings per share in the first full year.
The deal comes amid a flurry of prospective deals in the retail property sector with Britain’s Hammerson offering £3.2 billion to buy its smaller rival Intu and Brookfield being rebuffed in its attempt to buy GGP for $US15 billion.
