Westfield Holdings purchases strategic interest in Rodamco North America for A$920 million

27 August 2001

Countries: United States

Westfield Holdings Limited today announced it has purchased forA$920 million ( 537 million), a 23.9% strategic interest inRodamco North America (RNA) which has a portfolio of 41 shoppingcentres in the United States, from ABP, the largest Dutch pensionfund.

As a result, Westfield will become RNA’s largest shareholder.The balance of RNA shares are widely held.

The sale of the shares is consistent with ABP’s investmentpolicy to further spread its investments internationally and over alarger number of funds and increase its liquidity. In the light ofthis policy, in the past five years, ABP has already reduced mostof its major shareholdings. This transaction will reduce ABP’sinvestment in RNA from 30.5% to 6.6%.

RNA is a Netherlands-based company with the characteristics ofan Australian listed property trust and is listed on a number ofEuropean stock exchanges. RNA has total assets in excess of A$11.5billion (US$6.3 billion) and a market capitalisation of A$3.2billion (Euro 1.9 million). It is the third largest regional mallgroup in the US and is structured along traditional European lineswith a Supervisory Board and Management Board.

The Chairman of Westfield, Mr. Frank Lowy said “We are excitedwith the strategic acquisition which provides the potential tocreate the premier US shopping centre portfolio. In this regard, weplan to discuss with the Boards of RNA the strategic direction ofRNA, appropriate Board representation and Westfield’s ongoinginvolvement with the company. This will include management,leasing, revenue and capital initiatives, a long-term redevelopmentprogram designed to maximize the portfolio’s potential and apotential merger of RNA and Westfield America Trust’soperations.”

ABP has a long term relationship with Westfield throughinvestments in Westfield managed entities. ABP comments that, withWestfield as a major shareholder of RNA, substantial additionalshareholder value will be created for all RNA shareholders. ABPwill retain a substantial shareholding in RNA.

Westfield will pay ABP Euro 51.12 per RNA share representing atotal cost of A$920 million (Euro 537 million). The acquisitionwill be funded by: –

  • A$450 million equity issue through a bookbuild of WestfieldHoldings shares, underwritten by UBS Warburg.
  • A Share Purchase Plan raising up to A$60 million. This willprovide an opportunity for Westfield Holdings shareholders toparticipate in the capital raising at the same price asinstitutions (up to a maximum of A$3,000 per shareholder).
  • Existing debt facilities.

The equity raising represents more than 50% of the purchase costand maintains Westfield Holdings strong balance sheet. The purchaseprice represents a 10.1% historical earnings yield (based on RNA’s2000/01 results) and the acquisition will be earnings accretive toWestfield Holdings.

Mr. Frank Lowy said: “We are pleased to further our relationshipin this way with ABP, which is a large investor in Westfield Trustin Australia and with Rodamco, which has been a partner inWestfield-managed centres in Australia, the US and Asia since theearly ’90s.”