Westfield Corp Ltd (ASX: WFD) stock rose 13.67% on December 13, 2017 as the company received the takeover offer from France’s Unibail-Rodamco to create 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. WFD’s Board of Directors and Unibail-Rodamco’s Supervisory Board have unanimously recommended the proposed transaction. As per the agreement, WFD shareholders will receive a combination of cash and shares in Unibail-Rodamco, and the value of each Westfield security will be at a price of US$7.55 (or A$10.01) and this is a premium of 17.8% to WFD’s closing security price on December 11, 2017. The transaction implies an enterprise value for WFD of US$24.7 billion. With this move, creation of the world’s second-biggest mall owner by market value has been established.
Creation of Unique Platform: The combination of two companies will provide a unique platform of 104 assets, which will attract 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. Further, prospects through the world’s largest development pipeline of €12.3 billion focused on flagship assets in key markets proffer a strong organic long-term growth.
Slump in the share prices boosted investment: It has been highlighted that a fall in stock prices of listed property companies is leading investors to buy retail real estate with a view to converting it to other use. WFD stock has also been seen to plunging over 9% this year to date, and this along with its flagship portfolio might have triggered the deal. However, WFD stock has risen 7.19% in three months as on December 12, 2017, at the back of some boost in real estate sector as witnessed lately.
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Steps and time table (Source: Company Reports)
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