Westfield's famed Lowy family has sunk $177.3 million of its own money into the mega-mall owner’s offshore-focused arm Westfield Corporation, raising speculation the company might look to sell down its stake in Westfield’s Australian spin-off Scentre Group.
Yesterday the Lowy family revealed it had increased its stake in Westfield Corporation by 23.77 million shares to 9.5 per cent, from 8.36 per cent.
The share buy-up takes the Lowy family’s holding in Westfield to a whopping $1.47 billion.
The Lowys also own a 3.78 per cent stake in Scentre, which they received during the recent restructure of the Westfield empire and is now worth $654.35m.
Sources said the purchase represented a reinvestment by the family of a portion of the $682m it made selling its 7.1 per cent stake in Westfield Retail Trust (largely transformed into Scentre) in March last year.
But banking sources questioned whether, in light of the WRT sale 18 months ago, the Lowy family would look to reduce its holding in Scentre.
Westfield yesterday declined to comment on the family’s intention for its Scentre stake.
UBS, which handled the WRT block trade on behalf of the family, did not return calls.
The Lowys’ purchase of shares in Westfield Corporation was made through a private family entity, Hazel Equities, which counts family patriarch Frank Lowy, his eldest son David, who heads up the family’s private investment interests, and his youngest son Westfield co-chief executive Steven as directors.
Mr Lowy’s middle son Peter Lowy, also co-chief executive of Westfield, is also a beneficial holder.
Frank Lowy and his family — including grandchildren Noah Lowy, Benjamin Lowy and Joshua Lowy — now have an exposure to both entities through various family companies and direct holdings totalling $2.12bn.
The buy-up comes just months after the company successfully navigated a controversial restructure of the Westfield Group’s $70bn mall empire, under which its Australian properties were spun off into Scentre.
Westfield Corporation owns the group’s US and British malls and its offshore development pipeline, which includes Milan and possible interests in France and Brazil.
The Lowy family is worth $7.16bn, according to BRW. Frank Lowy is chairman of both Scentre and Westfield Corporation.
Phoenix Portfolios managing director Stuart Cartledge said the family’s purchase was in line with their focus being offshore. “I would argue that they are most likely to be a seller of Scentre Group over time come what may,” Mr Cartledge said.
“I’d like Frank and the Lowy family to retain some reasonable economic interest in Scentre Group while he maintains his position as chairman, though.
“Given his wealth, I’d be unhappy for him to sell Scentre Group and remain a director.”
An analyst, who declined to be named, said the increased holding would give the Lowy family greater defence against a takeover attempt of Westfield Corporation.
However, the analyst added it was unlikely to be linked to the family’s aspirations to list the company in New York.
This article first appeared in The Australian Business Review.