Trading in Westfield Retail Trust (WRT) today is creating a record of sorts, given the new buyers have no power to vote the stock at the coming meeting to determine its fate resulting in a market which, at the very least, is open to abuse.
The company issued a statement today underlining that the original record date for voting at the meeting stood, which means unless an existing owner changes his or her mind someone could have voted already and dumped the stock today.
WRT will shortly lodge with ASIC its proposed supplementary statement it plans to release tomorrow with the regulator’s approval.
ASIC wants to make sure shareholders have at least 10 days to make up their mind on the issue.
This time will be used by the Westfield camp to drum up retail and other shareholders to talk them into voting for the deal.
The stench surrounding the adjourned meeting will linger and cloud this deal, which in other ways is strategically sound.
The trouble was the move loads WRT with too much debt and too many costs when shareholders were happy with a company which basically simply collected rent from shopping centres.
Given the Lowy family wanted to change the terms and structure of the company, it is the family’s responsibility to put forward a deal that shareholders find acceptable.
The Lowy camp clearly misread the basis for the shareholder opposition and instead argued people were waiting for Frank Lowy to sweeten the offer when he had already decided not to.
Foreign proxy holders will now be asked whether they want to change their vote and have precious little time to do so.
The Australian Securities and Investments Commission (ASIC) should force Westfield to convene a new meeting and start all over again.
The arbitrage trade now for those who have already voted for the deal is to sell now having locked in their vote and that is exactly what is happening with Westfield up 0.6 per cent at $10.76 and WRT up 0.3 per cent at $3.20 a share.
Trading shares which carry incomplete rights is not how the system should work, but that is exactly what is happening now and ASIC should bring the farce to an end.