Gandel mulls value of CFS rights

It is understood the billionaire shareholder is taking his time to mull a proposal from the Commonwealth Bank, which is believed to value the rights at about 6 per cent of funds under management.

The amount being tipped by market sources is higher than what was previously anticipated by analysts -- between $400 million and $500 million.

Some sceptics in the property industry question whether the negotiations between Gandel and Commonwealth Bank played a part in the timing of Westfield Group's portfolio carve-up last week.

The shopping centre giant might have been mindful of a potential announcement by CBA about its asking price for the CFS Retail management rights and how its proposal to sell Westfield Group's management rights to Westfield Retail Trust would be perceived in comparison, a source said.

Another said it was unlikely to be a determining factor for Westfield and was more to do with finalising the deal before the end of the financial year, with shareholders to vote in May.

One analysts said it was a case of "smoke and mirrors" trying to decipher the true price being paid by WRT shareholders for the management rights.

But according to some estimates, a deal for Westfield to merge its Australian and New Zealand property interests with WRT would wipe $1.7 billion off the value of WRT's net tangible assets.

The cost of the deal was about $150 million, which would imply the value of the rights would be about $1.55 billion.

This would mean Westfield's management rights for its Australia and New Zealand assets was closer to 10 per cent of assets under management, which could appear expensive in light of what is being proposed for the rights of CFS Retail.

Gandel, a major CFS shareholder, has the first option to buy those management rights.

During the global financial crisis, the management rights of some groups were effectively given away. During the boom, former shopping centre empire Centro cut a deal for the sale of management rights at about 4 per cent.