Westfield Retail (WRT) and Westfield (WDC) are currently locking horns over the sale and acquisition of the jointly owned Malls in Australia and New Zealand.
This week the vote was delayed in a dramatic fashion after investors in Westfield Retail took offence when Frank Lowy tried to push the deal through by advising that if the deal did not go through they would look to sell their holding in the Malls to a third party.
For Westfield Retail investors what is this all about?
At present WRT and WDC have a joint venture involving their Mall properties in Australia and New Zealand.
WDC is looking to exit this investment and sell their half or the Malls to WRT. The issue to date has been around the price WRT will have to pay for the Malls.
The vote on the acquisition was taken to the shareholders, but failed to get the necessary 75% approval require to punch the sale through. They received only 74.1% with one investor a BT fund managed looking to improve the deal.
The deal will see the debt level of WRT increase from 22% to 37%, which in the current market is not desirable and most likely the main reason for WDC looking to dump the Malls.
For now the vote is delayed so investors can process WDC selling their shares to a third party and what the new joint venture would look like.
I expect to see further news on this next week.
The price of WRT is up from its lows of April but is expected to pull back until this uncertainty can be finalised.
WRT is currently paying a 6% yield and has been a solid performer in the sector since the split with WDC in 2010. It has net assets of $3.52 and is currently trading around $3.20.
For more information about Westfield Retail (WRT) please contact us on 07 4771 4577.