Westfield entities to merge to create world’s largest retail property group

22 April 2004

Countries: Australia, United States

The chairman of Westfield, Mr Frank Lowy, today announced a proposal to merge the three listed Westfield entities Westfield Trust (ASX:WFT), Westfield America Trust (ASX:WFA) and Westfield Holdings (ASX:WSF) which will create the worlds largest, listed retail property group. The new entity, to be known as Westfield Group, will be internally managed and based in Australia.

The merger will combine the financial strength and capabilities of each Westfield entity to provide the Westfield Group with the scale necessary to pursue global growth opportunities.

The proposal will create a Group with $34 billion of property assets and interests in 123 shopping centres with 19,500 retailers in Australia, New Zealand, the United States and United Kingdom.

Westfield Group will be the 8th largest entity on the Australian Stock Exchange with a market capitalisation expected to be in excess of $22 billion and is expected to generate distributions in the first 12 months to June 2005 in excess of $1.7 billion.

The rationale for the proposal is all about growth to create a global operating and financial structure to match global opportunities, Mr Lowy said.

Increasingly, these opportunities require substantial financial capacity and a balance sheet larger than any one of the existing Westfield entities.

Importantly, while the capital structure will change, the operating philosophy of Westfield will not.

The merger is expected to provide shareholders and unitholders in all three existing Westfield entities with higher returns than would be generated under the current structure.

It is continuing the evolution of Westfields group structure to provide a single, globally-integrated financial and operating platform facilitating growth. In addition it will provide improved access to capital at a lower cost and provide greater geographic flexibility. As a combined Group, Westfield is also expected to increase its weightings in the S&P/ASX Property Trust indices and the MSCI indices.

The merger proposal has the unanimous support of the boards of the three entities and will be achieved by stapling the securities of each of the three entities to form one stapled security.

Under the merger proposal, WFT unitholders will receive 0.28 new stapled securities for each WFT unit; WFA unitholders will receive 0.15 new stapled securities for each WFA unit; WSF shareholders will receive 1 new stapled security for each WSF share.

The forecast distribution for Westfield Group for the 12 months to June 2005 is $1.03 per security. This is forecast to increase to $1.10 for the 12 months to June 2006, an increase of 7%.

The equivalent distribution for WFT will increase to 28.8 cents per unit, a 15% increase over the previous year to June 2004 while the distribution for WFA will remain unchanged at 16.3 cents per unit, including a once-only, special distribution of 0.9 cents per unit.

It is expected that an Explanatory Memorandum, Independent Experts Report and Independent Accountants Report will be sent to investors in all Westfield entities in early June.

The proposal will be effected by a court-approved Scheme of Arrangement requiring a vote of WSF shareholders and by amendments to the constitutions of WFT and WFA approved by WFT and WFA unitholders at meetings expected to be held in early July. If approved, the merger is expected to be implemented later that month.

As part of the announcement, Directors have estimated distributions for the six months ended 30 June 2004 for each entity with the distribution record dates to be shortly before the implementation of the merger, to enable the new security to commence trading on an ex-dividend basis. The distribution estimate are 12.71 cents per unit for WFT (estimated 35% tax advantaged); 7.80 cents per unit for WFA (estimated 45% tax advantaged) and 13.58 cents per share for WSF (50% franked).

Deutsche Bank, UBS and Grange First Provident have been retained as joint lead advisors on the transaction. Other advisors to the transaction are: ABN Amro; Merrill Lynch; JP Morgan; Carnegie Wylie; Investec Wentworth; Citigroup; Goldman Sachs JBWere; Credit Suisse First Boston and Morgan Stanley.

**Westfield information line toll free within Australia 1300 766 010 or outside Australia +61 2 9240 7455

All amounts in this media release are in Australian dollars, unless otherwise stated.