BCN-08 Westfield reiterates support for French takeover as profit jumps

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BCN-08

AUSTRALIA-RETAIL-EARNINGS-FRANCE

Westfield reiterates support for French takeover as profit jumps

SYDNEY, Feb 22, 2018 (BSS/AFP) – Australian shopping mall giant Westfield
reaffirmed its support Thursday for a takeover by French firm Unibail-Rodamco
as it announced a jump in full-year net profit.

The company announced the deal, which would be the biggest-ever corporate
takeover in Australia, in December, but since then the cash and scrip offer
has lost its premium after a fall in the French property firm’s share price.

Despite this, and reported pressure from some fund managers for it to be
sweetened, the proposal continued to have “the full support of the Lowy
family (the chief executives) and the Westfield board”.

The backing came as Westfield posted a 13.5 percent lift in annual profit
to US$1.55 billion, shrugging off tough retail conditions and competition
from online platforms like Amazon.

Revenue in the year to December 31 rose 17.1 percent to US$2.1 billion.

“The performance of Westfield for the year was solid and we remain
confident with the strategy of developing and transforming flagship assets,”
said joint chief executives Peter and Steven Lowy.

“Over many years we have adapted and improved our portfolio to meet the
changing needs of retailers, consumers and brands, and this remains a core
strength of Westfield.”

They pointed to the successful opening of a redeveloped Century City in
Los Angeles and the expansion of UTC in San Diego, along with progress on
expansions at Westfield London and Valley Fair in Silicon Valley.

The decision to sell the business to Unibail-Rodamco comes with mall
operators embarking on a consolidation drive as they face increasingly tough
competition from online shopping sites.

Unibail-Rodamco is Europe’s largest commercial landlord and the intended
purchase comes as it offloads smaller assets in Europe to focus on bigger
shopping centres, which are likely to be better suited to fending off the
march of e-commerce giants.

Unibail has offered 0.01844 of its shares for every one share of
Westfield, plus US$2.67 cash, valuing the company at US$24.7 billion.

At the time it was worth Aus$10.01 per Westfield share, but that has now
fallen under nine dollars due to currency volatility and a slump in Unibail’s
stock price.

Unibail-Rodamco’s Paris-based chief executive Christophe Cuvillier earlier
this week indicated that there would be no increase.

The future combined portfolio of the merged companies would include key
centres like Westfield London, Westfield World Trade Center in New York, and
the Forum des Halles in Paris.

Westfield said on Thursday an explanatory document setting out the finer
details of the takeover would be sent to shareholders in April with a vote
expected in the second half of the year.

BSS/AFP/HR/0948