Sir Frank Lowy will sell his global shopping empire Westfield to Europe’s largest landlord, Unibail-Rodamco for $32 billion in what will be Australia’s largest takeover.
The takeover is part of a trend that’s seeing declining store sales pushing mall operators contending with the relentless pressure of online commerce worldwide to consolidate.
The Westfield board has unanimously recommended a scrip and cash bid, offering Westfield unitholders 0.1844 Unibail-Rodamco shares for every Westfield share, and $US2.67 cash.
The deal values the company at $10.01 a share. That is a 17.8 per cent premium to Westfield’s last traded share price.
The Lowy family will hold a significant stake in the merged operation and Unibail-Rodamco will maintain the Westfield brand
This is a new chapter in the story of Westfield which began in 1959 with one shopping mall in the outer suburbs of Sydney,
Westfield is now one of the world’s biggest shopping centre owners and managers. It has 35 malls and 6500 retail outlets worth $32 billion, spread across London, New York, San Francisco and Los Angeles, according to its website. Its properties include the retail space in New York’s World Trade Centre and the Shepherd’s Bush shopping centre in London.
The takeover comes at a time when shares of mall owners worldwide are falling as they try to reinvent shopping centres in the face of relentless pressure from online retail. Westfield shares have been trading 9.4 per cent lower this year.
The deal is expected to see Frank Lowy, who was formally knighted at the beginning of this week, take an honorary chairman’s role at the combined group. Westfield co-CEO Peter Lowy will take a seat on Unibail-Rodamco’s board.
Sir Frank is one of Australia’s greatest business success stories, having arrived in Australia in the early 1950s after fleeing Nazi-occupied Hungary during World War II.
The deal will be put to a shareholder vote next year, as part of a scheme of arrangement.