France’s Unibail-Rodamco rules out upping Westfield bid

The two companies announced the deal, which would be the biggest-ever corporate takeover in Australia, in December.

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.

Unibail offered 0.01844 of its shares for every one share of the Australian-listed 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 is in Australia this week to sell the bid to local investors and told reporters “the price is what the price is”.

“We think the price is full and fair and we think its the best price for Unibail-Rodamco shareholders and Westfield shareholders,” the Sydney Morning Herald quoted him as saying.

“When you think about, two-thirds of Unibail-Rodamco shareholders are necessary to vote in favour of this and 75 percent of Westfield shareholders … so it has to be at the right price for our shareholders and the right price for Westfield shareholders.

“And we think the price is right.”

Despite this, some fund managers see scope for the offer to be sweetened.

Folkestone Maxim Asset Management managing director Winston Sammut told The Australian newspaper the question for Westfield shareholders was “are they getting an adequate premium for giving up ownership of what are considered by many, as among the best retail assets in the world?”

The deal comes with mall operators embarking on a consolidation drive as they face increasingly tough competition from online shopping sites such as Amazon.

The market is now waiting for the explanatory document which should give better indication of timing and set out the finer details. Westfield reports its annual results on Thursday.

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.