Unibail-Rodamco SE, Europe’s largest commercial landlord, has agreed to buy Australia’s Westfield Corp for A$20.8 billion (US$15.7 billion) amid a consolidation of mall operators worldwide.
The Paris-based company offered a combination of cash and stock, valuing Westfield at A$10.01 per share, or about 18 percent more than Monday’s closing price, it said in a statement yesterday.
The offer has been unanimously recommended by Westfield’s board of directors.
Photo: Reuters
“The acquisition of Westfield is a natural extension of Unibail-
Rodamco’s strategy of concentration, differentiation and innovation,” Unibail-Rodamco CEO Christophe Cuvillier said in the statement. “It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.”
Mall operators have been involved in a wave of mergers and acquisitions globally as the rise of e-commerce has squeezed traditional retailers.
Shares of such companies have been hit hard and store closures are accelerating, pressuring landlords to fill empty space and reinvent shopping centers.
Founded by billionaire Frank Lowy, Westfield began in 1959 with one shopping mall in the outer suburbs of Sydney and has grown to become one of the world’s largest shopping center owners and managers.
Westfield owns and operates 35 malls in the US and UK valued at US$32 billion, according to its Web site. It gets almost 70 percent of its US$1.8 billion annual revenue in the US, where companies are trying to repurpose struggling brick-and-mortar shopping centers.
Unibail offered 0.01844 of its shares plus US$2.67 in cash for each Westfield security, representing a 65 percent stock to 35 percent cash split, according to the statement.
Unibail-Rodamco has been selling smaller and less dominant assets in its European retail portfolio and reinvesting the proceeds in its development pipeline, which includes larger malls that are expected to be more resilient to the growth of online shopping.
The company has 8.1 billion euros (US$9.55 billion) of planned projects, according to its Web site.
The company was preparing to sell a pair of shopping centers in the Netherlands for US$660 million, Bloomberg reported in September.
Shares of Westfield have declined 9.4 percent this year, headed for their worst performance since 2011. The shares were suspended yesterday ahead of the announcement. Unibail-Rodamco shares have fallen 1.2 percent.
In other signs of consolidation in the industry, Brookfield Asset Management Inc is seeking to buy the portion of mall owner GGP Inc it does not already own.
New York-based hedge fund Third Point is pushing for change at Macerich Co, including a possible sale, after building a stake in the real-estate investment trust, people familiar with the matter said last month.
Shares of Simon Property Group Inc, the biggest US mall owner, have fallen 8.7 percent this year. Even after getting a boost from Brookfield’s interest, GGP shares are down 6.4 percent since the beginning of the year.
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