Clock ticking on Westfield votes

Colonial First State Global Asset Management, with almost 2 per cent of WRT, said it believed the deal transferred too much value to shareholders of Westfield Group and that it would be happy if Mr Lowy followed through on a threat to spin the Australian and New Zealand assets into a third listed entity, rather than the proposed deal.

“We believe a separate Westfield entity to be a good outcome for Westfield Retail Trust unitholders,’’ CFSGAM head of property securities Stephen Hayes told The Australian.

“The new Westfield entity would share over 90 per cent of their assets with the Westfield Retail Trust, ensuring even greater alignment of interest on the day-to-day management activities of the commonly owned properties.”

The comments came as judge Paul Brereton in the NSW Supreme Court set a June 20 date for Westfield Retail Trust to reconvene an adjourned meeting to vote on the Westfield Group deal and ordered that only shares on record at the original May 27 cut-off date would be eligible to vote.

The decision has sparked a campaign by opposing sides to secure new votes or change the votes of investors who had already voted ahead of the meeting. The deal was facing defeat, with proxy votes running 74.1 per cent in favour of the deal, short of the required 75 per cent, and not enough shares to be voted from the floor to change the outcome.

Sources said yesterday that just tens of millions of WRT’s 3.1 billion shares would be enough to swing the vote either way.

Australian Shareholders’ Association company monitor Allan Goldin, in court for yesterday’s hearing, said the failure of the majority of shareholders — as opposed to shares — was a major problem for Westfield and other companies.

“The 77,000 who didn’t vote last time can vote this time,” Mr Goldin said. Sources said retail votes had been running as high as 80 per cent in favour of the deal. Of WRT’s 3.05 billion shares, 2.28 billion, or 74.9 per cent, were voted.

Westfield Group has proposed spinning its 50 per cent interests in the Australian and New Zealand shopping malls, along with management and development rights, into a merger with WRT, which holds the passive share of the same assets.

In documents released to the ASX last night, WRT chairman Dick Warburton said the threat to establish a new company strengthened the board’s conviction that the sweetened merger deal should go ahead. If it did not, WRT was unlikely to have the opportunity to acquire the management and development rights to the centres as well as full ownership of them, and a new offer was unlikely. Mr Warburton warned investors that WRT may become uncompetitive in bidding for assets and that investors may prefer the other company if it was able to generate superior returns.

While the deal has won support from a majority of shareholders — many of whom have stakes in both companies — it has struck resistance from a range of institutions including one of the nation’s biggest industry funds, UniSuper — with 8.5 per cent of WRT — Colonial, Legg Mason and APN.

Mr Warburton said last Thursday he adjourned the meeting — following Mr Lowy’s comments that WDC would pursue a demerger of its local assets from the international operations — to give investors the chance to consider the “material’’ new information.

Opposition to the deal came despite WDC offering a $300m sweetener. It has ruled out making further concessions.

But sources close to WRT said that if WDC did pursue its own plans for the new company it would be a missed opportunity to create Australia’s pre-eminent shopping centre operator in Scentre Group.

Mr Lowy’s proposed spin-off could also quickly lower borrowings or raise money for new developments by selling off stakes in jointly owned malls to global pension funds.

WDC is yet to provide further information about these plans and some critics have insisted it will not happen.