Westfield Corporation could become a takeover target ahead of the mega mall owner’s expected listing in New York, according to analysts at Moelis Australia.
Moelis has pinpointed Simon Property Group and Taubman Centres as potential suitors for Westfield Corporation.
The Australian understands that Simon is widely seen as a logical partner and is mulling its options.
Simon was also raised as a potential suitor of another Australian mall owner, CFS Retail, during its management internalisation process last year.
Westfield Corporation was born out of last month’s restructure of the company chaired by billionaire Frank Lowy. The restructure also saw Westfield spin off its Australian and New Zealand malls into a new company, Scentre.
Westfield Corporation owns $26.6 billion of assets including shopping centres in the US, Britain and an extensive development pipeline that includes the World Trade Centre development in New York and Westfield Milan, which promises to be the second largest mall in Europe.
“In our view Westfield Corporation is clearly more likely to get taken over than Westfield Group was, given its smaller size, geographic concentration and higher percentage of trophy malls (both completed and in the pipeline),” the analysts wrote in a note to clients.
The analysts note that the Lowy family — which through direct and indirect interests owns $1.28bn in Westfield Corporation, or 8.36 per cent — is an unlikely seller ahead of the completion of the company’s key developments.
“The cheapest (and probably most effective) way of buying Westfield Corporation would be to launch a takeover while it is still listed in Australia and before the likes of WTC, Croydon, London II, Milan, Century City and Valley Fair developments complete,” the Moelis analysts said.
Westfield Corporation is widely expected to seek a dual listing in America; however, that strategy could contain significant takeover risk for the company, according to Moelis.
“With a primary listing in Australia, Westfield may be more vulnerable to takeover under Australian corporation law than with say a US listing, domiciled out of Delaware.”
“Hence, a smart strategy would be to accumulate a position in WFD and wait for the existing team to complete much of the pipeline and divest a significant number of sub-optimal US properties.”