Shopping centre giant Westfield is demerging its international operations from its Australian and New Zealand business.
The international business of Westfield Group (WDC) will become Westfield Corporation, to be led jointly by Steven Lowy and Peter Lowy, current co-chief executives of Westfield Corporation.
Michael Gutman, the current managing director UK/Europe and new markets for Westfield Group, will become president and chief operating officer of the new Westfield Corporation, reporting to Steven Lowy.
The new Australasian business, which will be created from the merger of WDC’s Australia/NZ business with Westfield Retail Trust (WRT), will be called the Scentre Group.
WDC founder and chairman Frank Lowy will become chairman of both groups. Both will be listed on the ASX with separate boards and management teams.
It is proposed that the current board of WDC will become the board of the new Westfield Corporation. The board of the new Scentre Group will include current members of the WRT board.
The new Westfield Corporation will have total assets of $17.6bn (£10.8bn) comprising interests in 44 centres in the US, the UK and Europe, plus its current developments including Croydon south London.
The Scentre Group – an internally managed REIT – will have total assets of $28.5bn comprising interests in 47 centres. It will be led by Peter Allen, current group chief financial officer of WDC.
Both group’s shopping centres will keep the Westfield brand.
“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,” Frank Lowy said.
“They can each operate more efficiently, and generate greater growth and value for investors by being independent.
“The proposals represent the latest in a series of capital restructures that have maintained the success of Westfield since it was first listed in 1960.”
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 $850m capital return, equivalent to a pro rata buyback of WRT securities at $3.47 a security, representing a 14% premium to its current share price.
WDC shareholders will receive 1,000 securities in the new Westfield Corporation and 1,246 securities in Scentre Group for every 1,000 WDC securities held.
The proposal has the unanimous support of the WDC board and independent directors of the WRT board, and is subject to security-holder approval in May 2014.
bridget.oconnell@estatesgazette.com
