Europe's Unibail bids $16 billion for Westfield to counter online threat

Europe's Unibail bids $16 billion for Westfield to counter online threat

"The acquisition of Westfield is a natural extension of Unibail-Rodamco's strategy of concentration, differentiation and innovation", said Christophe Cuvillier, chairman of the management board and CEO of Unibail-Rodamco. The company also is developing malls in Brussels and Hamburg, Germany, according to The Times.

The sale of Westfield follows retail real estate investment trust GGP Inc.'s rejection of a $14.8 billion offer from Brookfield Property for the two-thirds it did not already own.

The deal, which would offer Westfield shareholders a combination of cash and shares in Unibail-Rodamco, values Westfield shares at US$7.55 each, or A$10.01, representing a almost 18% premium to Westfield's most recent share price of A$8.50.

As sales fall so do retail property prices, to the point where they become attractive as a discount to asset value.

Westfield, headquartered in Sydney, Australia, owns 35 shopping malls in Los Angeles, San Francisco, New York, London and Milan, including the 1 World Trade Center mall in Lower Manhattan, which opened in August 2016. Unibail expects the deal to close in the first half of 2018.




Westfield has been viewed as a pioneer in US mall redevelopment, focusing on luxury properties rather than lower-end malls located in less affluent locations where hundreds of stores have been shuttered.

"Unibail is mounting the biggest takeover of a company in the Asia-Pacific region this year - and the largest ever in Australia - as mall owners seek to contend with relentless pressure from online commerce".

Shares of such companies have been hit hard and store closures are accelerating, pressuring landlords to fill empty space and reinvent shopping centers.

Chairman Sir Frank Lowy, who was knighted just this week by Queen Elizabeth II says the move was part of its journey, and had been on the cards since its 2014 restructure. Steven Lowy serves on Scentre's board.

Westfield's portfolio includes shopping areas at United States airports such as Newark Liberty International, John F. Kennedy International, Los Angeles International and Orlando International. The company on Tuesday said this had set it up for the Unibail deal.

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