Shopping centre magnate Sir Frank Lowy has struck a deal to sell his Westfield empire in a mega deal worth $32 billion.
Westfield Corporation, founded by Sir Frank in the 1950s, is set to be taken over by European commercial property giant Unibail-Rodamco.
The deal values Westfield at $10.01 a share — a 17.8 per cent premium to its last closing price — and will hand shareholders both cash and shares in Unibail-Rodamco.
Sir Frank will collect $1.98 billion in cash and stock if shareholders green light the deal which will create a global property giant with 104 shopping malls a across Europe and the United States.
Sir Frank said the deal was the culmination of a strategic journey Westfield has been on since a major restructure in 2014, when it split its domestic and international assets.
“Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business,” he said.
Australian-Israeli businessman Frank Lowy, chairman of the Westfield Corporation, poses with his medal after being created a Knights Bachelor (Knighthood). Picture: AFPSource:AFP
“We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations”
Sir Frank, 87, founded Westfield in the late 1950s with one shopping centre in Sydney’s western suburbs.
Today it owns and runs 35 shopping centres in the US and UK.
It spun off its Australian and New Zealand assets into the separately-listed Scentre Group in 2014.
Sir Frank still has a 0.65 per cent stake in Scentre worth $152 million.
The octogenarian billionaire chairs Westfield while his sons, Peter and Steven, are joint chief executives.
A statement from Westfield said the family intended to maintain a substantial investment in the new group.
Sir Frank is regarded as one of the nation’s great success stories having arrived in Australia in the early 1950s after fleeing Nazi-occupied Hungary during World War II.
The deal with Unibail comes less than a week after Sir Frank was formally awarded a knighthood by Queen Elizabeth II at a ceremony in London.
Unibail is Europe’s largest commercial real estate company.
It owns 71 shopping centres across Europe as part of a wider €42.5 billion ($66.5 billion) portfolio.
Westfield has been on Unibail’s radar for some years as it looks to increase its holdings in the US.
The two held discussions about a takeover in 2014 but could not agree of a deal.
Shares in Westfield, which earns about 70 per cent of its revenue from the US, were put in a trading halt before the stock market opened yesterday.
They have fallen more than 20 per cent since mid last year as investors fret about the ability of shopping centre owners to continue delivering fat returns amid the rise of online shopping.
The slide in the value of shopping centre owners is prompting an uplift in merger and acquisition activity across the globe.
Originally published as Westfield accepts $32.7 billion bid.
Source: news.com.au