European property giant Unibail-Rodamco SE announced the acquisition of Frank Lowy’s Westfield Corporation to create the world’s premier developer and operator of flagship shopping destinations. The proposed transaction has been unanimously recommended by Westfield’s Board of Directors and Unibail-Rodamco’s Supervisory Board.
The 87 years old Australian billionaire Frank Lowy has developed shopping center network in European and U.S. enterprise which value for US$24.7 billion.
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Westfield owns the Oculus Mall in the World Trade Center in New York and two large shopping malls in London.
Under the terms of the agreement, Westfield securityholders will receive a combination of cash and shares in Unibail-Rodamco, valuing each Westfield security at a price of US$7.55 (or A$10.01) and representing a premium of 17.8% to Westfield’s closing security price on December 11, 2017.
The business combination is a unique value proposition for both Unibail-Rodamco shareholders and Westfield securityholders, who will benefit from:
- The creation of a global property leader with €61.1 billion (US$72.2 billion) of Gross Market Value (“GMV”), strategically positioned in 27 of the world’s most attractive retail markets and cities ;
- A unique platform of 104 assets attracting 1.2 billion visits annually, creating a must-have partner for all global retailers and brands across Europe and select markets in the United States. 56 of the 104 assets, representing 84% of the combined GMV, are flagship shopping destinations ;
- The progressive roll-out of the world famous Westfield brand in the Group’s flagship shopping destinations ;
- Strong organic long-term growth prospects through the world’s largest development pipeline of €12.3 billion focused on flagship assets in key markets ;
- A value creating transaction, which Unibail-Rodamco expects to be accretive to its recurring earnings per share in the first full year, with expected run-rate synergies of €100 million per annum ;
- A robust balance sheet, with an expected credit rating in the “A” category post Transaction and an expected pro forma Loan-To-Value (“LTV”) of 39% as at June 30, 2017, well within Unibail-Rodamco’s historical objective of between 35% and 45% ;
- An attractive dividend distribution policy, representing 85% to 95% of the Group’s pro forma recurring net earnings ;
- An efficient structure with the Group operating as a REIT in France, the Netherlands, the United Kingdom and the United States ;
- An enlarged capital markets profile with a pro forma market capitalization of €31.1 billion, increased stock liquidity and inclusion in major equity indices in Europe and Australia ;
- A best-in-class management team, leveraging Unibail-Rodamco and Westfield’s superior track records and the strengths of both groups, with the support of their 3,700 employees ;
- Post Transaction, Christophe Cuvillier will be the Group Chief Executive Officer and Colin Dyer will be the Group Chairman of the Supervisory Board