Lowy to sell off holdings for $32b
Innovation boosts economy by $110b
SHOPPING centre magnate Frank Lowy is moving to sell out of his global Westfield empire in a mega deal worth more than $32 billion.
Westfield Corporation has backed a buyout offer from Paris-based commercial property titan Unibail-Rodamco.
The cash-and-scrip deal values Westfield at $10.01 a share — a 17.8 per cent premium to its closing price on Monday, before the offer was unveiled.
Announced late yesterday afternoon, it values Westfield at $US24.7 billion ($32.8 billion) including its debt.
Sir Frank is the biggest shareholder in Westfield with a 9.5 per cent stake.
He will collect $1.98 billion in cash and Unibail stock if shareholders approve the deal, which will create a goliath with 104 shopping malls across Europe and the US.
The boards of both Westfield and Unibail have unanimously backed the transaction.
Westfield shareholders will receive 0.01844 Unibail-Rodamco shares and $US2.67 in cash for each of their shares.
Unibail will list securities on the local stock market.
Sir Frank said the deal was the culmination of a strategic journey Westfield has been on since a major restructure in 2014, when it split its domestic and international assets.
“Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business,” he said.
“We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations”
Sir Frank, 87, founded Westfield in the late 1950s with one shopping centre in Sydney’s western suburbs.
Today it owns and runs 35 shopping centres in the US and UK. It spun off its Australian and New Zealand assets into the separately-listed Scentre Group in 2014.
Sir Frank still has a 0.65 per cent stake in Scentre worth $152 million.
The octogenarian billionaire chairs Westfield while his sons, Peter and Steven, are joint chief executives.
A statement from Westfield said the family intended to maintain a substantial investment in the new group.
Sir Frank is regarded as one of the nation’s great success stories having arrived in Australia in the early 1950s after fleeing Nazi-occupied Hungary during World War II.
The deal with Unibail comes less than a week after Sir Frank was formally awarded a knighthood by Queen Elizabeth II at a ceremony in London.
Unibail is Europe’s largest commercial real estate company. It owns 71 shopping centres across Europe as part of a wider €42.5 billion ($66.5 billion) portfolio.
Westfield has been on Unibail’s radar for some years as it looks to increase its holdings in the US. The two held discussions about a takeover in 2014 but could not agree on a deal. BUSINESS innovation has contributed $110 billion to the Australian economy in the past year, according to a report by the Commonwealth Bank.
CBA executive Adam Bennett said businesses were investing in innovation to lift productivity and respond to challenges and opportunities.
“The research shows this investment in innovation is paying off – not just for individual businesses that are embracing innovation, but for the broader economy,” he said.
The CommBank Business Insights Report looked at the performance of companies with two or more employees turning over at least $500,000 a year. It found on average, businesses that invested in innovation spent $300,000 in the past 12 months, and the revenue gains and cost savings derived from that investment jumped 46 per cent from the previous year to an average of $592,000 per business.
This equates to a return on investment (ROI) multiple of 1.97. Queensland businesses had an ROI of 1.45, the lowest of all states, after investing on average $428,436 in innovation for a return of $592,000. The benefit to the Queensland economy was $24 billion over the past year.