Mega-mall owner Westfield Corporation is in the sights of French shopping centre giant Unibail-Rodamco as the company looks to expand its business into the US.
Westfield has been mooted as a potential takeover target for other large mall owners after the group completed a huge restructure in June in which its entire Australian operations were spun off into a new entity, Scentre.
Westfield, in which billionaire founder Frank Lowy and his family hold a 9.5 per cent stake, owns and manages a $US27.7 billion ($35.6bn) portfolio of 40 malls in the US and Britain as well as a development pipeline that includes a project in Milan that promises to be Europe’s second-largest retail centre and the World Trade Centre mall in New York.
According to reports out of The Netherland’s Unibail-Rodamco, formed through the merger of France’s Unibail and Dutch mall owner Rodamco in 2007, is running the numbers on the Australian-listed mall owner.
The speculation was sparked by a note from merchant bank Kempen & Co after Unibail-Rodamco last week said its earnings per share growth would come in between 6 per cent and 8 per cent, surprising the market, which had expected a slightly higher forecast.
“We reckon the only positive of the lower earnings guidance is that it is now easier to make a deal accretive,” the bank said in its note.
It said a deal between Unibail-Rodamco and Westfield would give the Paris-headquartered company exposure to a company “that is very active in the US”.
Yesterday Westfield declined to comment on whether it had been approached by the company or had held any discussions with the group.
Unibail-Rodamco has a market capitalisation of $36bn and owns 90 malls in 12 countries in Europe with a combined value of $39.7bn.
Last year, the president of American real estate giant Simon Property Group, David Simon, was forced to hose down rumours his company was eyeing Westfield after reports he had visited Australia to hold discussions with the Lowys. Westfield’s second-tier malls are widely seen as being a good fit with the Simon Property Group portfolio.
Meanwhile, Westfield has also been trying to expand its own business through tendering for major development projects in France.
In 2013, it was pipped by Unibail-Rodamco on a major contract to build a new 500-store mall in Cagnes-sur-Mer on the French Riviera.
Westfield closed down 2c at $9.86 on Friday.
This article first appeared in The Australian and is reproduced here with permission.