Aussie shareholders to pocket record Westfield payout
Australian shareholders in Westfield will receive a record cash payout of $7.36 billion when the shopping centre empire is taken over by Europe’s Unibail-Rodamco, new data shows.
The data, compiled by investment bank UBS, shows three of the nine so-called megadeals — those larger than $US10 billion — involving Australia have been associated with the family headed by Frank Lowy.
These were the $US24.7 billion Unibail-Rodamco takeover, the $21.8 billion internalisation by Westfield of two property trusts in 2004 and the controversial demerger of Westfield’s Australian assets, renamed Scentre, in 2013 at a value of $13.4 billion. The Lowys were forced to sweeten the Scentre demerger for shareholders after an investor revolt threatened to derail it.
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Together, the three deals total almost $US60 billion, about 45% of all megadeals done in Australia.
UBS managing director of real estate Tim Church says the data “highlights how the Lowy family have so effectively used the scale of their platform to not only create the best retail assets in the world but to do value-creating corporate transactions of scale and significance for the benefit of shareholders”.
He says the Unibail-Rodamco deal announced last month offers the largest cash distribution seen in the real estate investment trust sector, even though cash is only 35% of the total consideration offered to Westfield shareholders (the rest is to be paid in Unibail-Rodamco stapled securities).
“The next closest deal is the all-cash offer of $4.7 billion in August 2007 by Morgan Stanley Real Estate when they took over Investa Property Group,” Church says. “The cash component of the Unibail-Rodamco/Westfield deal eclipses this previous high watermark by an additional $2.7 billion, which will be ‘net net positive’ for the REIT sector as part of this is reinvested into the sector.”
UBS worked on six of the nine Australian M&A megadeals, including all three Westfield-related transactions.
Westfield Tower in Sydney’s CBD.
The Unibail-Rodamco deal upended M&A league tables, with nine of the top 10 in Mergermarket’s 2017 table for Australasia, released last week, benefiting from the transaction.
This included UBS, which came in at number one with a total deal value of $40.9 billion after charting at number two in 2016 with $35.1 billion.
It also rocketed overseas advisers to the deal from the lowest reaches of the table into the top 10. BNP Paribas powered from number 78 in 2016, with a mere $100 million of deals under advice, to seventh — an increase of some 27,773%. It also lifted Rothschild from 26th to ninth and Jefferies from 55th to 10th.
This article originally appeared on www.theaustralian.com.au/property.
