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Valencia Town Center owner Westfield bought for $15.8B

13 December 2017

Westfield Corp., the Australia-based company that operates USA shopping malls including at the World Trade Center in NY, said Tuesday it has agreed to a takeover by European property company Unibail-Rodamco valuing it at 20.8 billion Australian dollars (US$15.7 billion).

The companies said Tuesday that the cash and shares deal would create a company with 104 shopping centers in 13 countries that bring in an estimated 1.2 billion visits a year.

Unibail will acquire Westfield for $7.55 per share, a 18 percent premium over Westfield's closing price on Monday. The mall, anchored by Macy's, Sears, and JC Penney, has more than 200 stores.

Unibail was helped by very cheap European debt in the 2.0-2.5 percent range and synergies that will result in about $100 million in cost savings, said Scott Crowe, chief investment strategist at real estate focused CenterSquare Investment Management in Philadelphia.

"The acquisition of Westfield is a natural extension of Unibail-Rodamco's strategy of concentration, differentiation and innovation", Unibail CEO Christophe Cuvillier said in a news release. It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the USA.

"Westfield was built by Frank Lowy, the billionaire shopping center tycoon who started with one shopping center outside of Sydney in 1959".

"This is really the polarization of shopping mall markets".

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One challenge he faced was a shareholder revolt in 2014 over his proposal to demerge Westfield's Australian and New Zealand assets from the US and United Kingdom portfolio, they continue.

Both companies' boards of directors have approved the transaction, which must also be approved by shareholders.

Westfield separated its operation in Australia and New Zealand from that in the USA and Europe in 2014.

Westfield's Frank Lowy added: "The transaction announced today is the culmination of the strategic journey Westfield has been on since its 2014 restructure".

His sons, Peter Lowy and Steven Lowy, are co-chief executives of Westfield, which spun off its Australian and New Zealand assets in 2014 into Scentre Group.

Not yet. Unibail-Rodamco's value fell as much as 4.1% on news of the deal.

Valencia Town Center owner Westfield bought for $15.8B