|Westfield Group (WDC) today announced a major restructure separating ANZ and international entities.|
The shopping centre giant is proposing to merge WDC's Australian/NZ business with Westfield Retail Trust to form a new entity to be known as the Scentre Group. The international business of WDC will be known as Westfield Corporation.
Scentre Group, generates annual retail sales of $22 billion, will be the largest Real Estate Investment Trust on the ASX, and presents a retail property investment opportunity to investors.
The new Scentre Group has total assets of $28.5 billion comprising interests in 47 centres including Westfield Sydney and Bondi Junction. The centre's house major retailers including Myer, JB Hi-Fi and Harvey Norman.
Both Westfield Corp. and the local entity will still have links but will be listed on the ASX separately, have separate boards and management teams, but will maintain the Westfield brand on their centres.
The malls are visited 555 million times every year.
The changes announced today, aren't finalised and "there's still a lot more work to be done" a source told CN.
Frank Lowy Chairman of Westfield Group, will be the Chair of both new entities.
Under the terms of the proposal, WRT security holders will receive $285 and 918 securities in the new Scentre Group for every 1,000 WRT securities held.
The cash payment will be effected through an $850 million capital return, equivalent to a pro rata buyback of WRT securities at $3.47 per security.
WDC securityholders will receive 1,000 securities in the new Westfield Corporation and 1,246 securities in Scentre Group for every 1,000 WDC securities held
"Westfield's international business and its Australian/NZ business have both grown in scale and quality to the stage where they can now stand on their own," Lowy said.
"They can each operate more efficiently, and generate greater growth and value for investors, by being independent.
"We believe that this new structure will create more value for investors going forward".
Under the new structure, Scentre Group will be internally managed, and will have significant scope to increase long term returns through its development pipeline and the opportunities to joint venture its wholly owned assets.
The retail giant is currently developing projects worth $1.2 billion including Miranda in Sydney and Mt Gravatt in Brisbane, and development pipeline includes $3 billion of future projects, including Warringah in Sydney, Chermside in Brisbane.
Westfield Corporation has total assets of US$17.6 billion comprising interests in 44 centres in the US/UK/Europe.
The proposal has the unanimous support of the WDC board and the independent directors of the WRT board.