Westfield Trust makes cash takeover offer for AMP Shopping Centre Trust
20 May 2003
The Chairman of Westfield, Mr Frank Lowy, today announced that Westfield Trust will make an all-cash takeover offer for the outstanding units (including all rights) in AMP Shopping Centre Trust (ART) at $1.80 per unit, valuing ART’s assets at $1.9 billion.
Westfield Trust currently has a 19.9% interest in ART.
Westfield Trust’s takeover offer includes the following conditions:
- Westfield Trust obtaining a minimum of 50.1% of ART’s units; and
- AMP Life Limited agreeing by 27 May, 2003, not to exercise any pre-emptive rights it may have upon a change in the responsible entity of ART to Westfield Management Limited.
“Westfield Trust’s offer is compelling and outstanding for all unitholders,” Mr Lowy said.
Westfield Trust’s takeover offer provides the following benefits to ART unitholders:
- an all cash bid;
- a premium of approximately 28.4% to the weighted average ART unit price for the one month prior to the announcement of Centro’s scrip and cash offer for ART on 18 March 2003;
- a premium to date of 9.3% to the average value of Centro’s takeover offer since it was announced on 18 March 2003;
- a 28.6% premium to ART’s reported net tangible asset backing per unit as at 31 March 2003; and,
- it is at the top end of the Deloitte Touche Tohmatsu’s valuation range of ART as expressed in its Independent Expert’s report in the ART Target Statement of 22 April 2003.
The Managing Director of Westfield, Mr Steven Lowy, said today:
“The acquisition of the ART portfolio, which is a very high quality shopping centre portfolio, represents a unique growth opportunity for Westfield Trust.
“The addition of the ART centres would further strengthen the Westfield Trust portfolio in terms of quality and performance. We have assessed the ART properties and are confident that income gains can be achieved.
“Our preliminary analysis indicates that at $1.80 per unit, and with Westfield’s input on the ART portfolio, Westfield Trust anticipates it will receive an ungeared yield of 7% from the ART portfolio by the end of 2004 compared with the current 6.5%. In the event this is not achieved, Westfield Holdings will rebate management fees earned from this portfolio from completion of the bid until December 2005 to achieve this 7% yield.”
The acquisition when completed will be earnings accretive to Westfield Trust with distribution growth per unit expected to increase to 3.75% for the full year 2003, assuming the transaction is completed by 1 July 2003, and 3.75% for 2004 off the higher 2003 base. This compares with the current market consensus forecasts of 3% distribution growth per unit for each of the full- year 2003 and 2004 periods.
The takeover offer will be funded out of debt facilities.
Westfield Trust intends to sell its interest in up to three properties from the combined portfolio representing approximately $500 million, in line with its long-term asset strategy and to meet any regulatory requirements.
Westfield Trust’s forecast gearing will increase to approximately 39% prior to the intended asset sales and will reduce to 36% after the sale of the properties, remaining within the gearing policy of the Westfield Trust Board.
Westfield Trust has entered into an underwriting agreement with Deutsche Bank to underwrite, at Westfield Trust’s option, up to $500 million of its distribution reinvestment plan until 31 March 2006.
Upon completion of the bid and intended asset sales, Westfield Trust’s interests in shopping centres in Australia and New Zealand would increase from 42 to 48, with a total value of $11.5 billion.
The takeover offer will be subject to the conditions set out in the annexure. Westfield intends to lodge its Bidder’s Statement shortly.
(i) Minimum acceptance condition
Before the end of the Offer Period, Bidder has a relevant interest in 50.1% or more of the ART Units then on issue.
(ii) Consent not to exercise any Pre-emptive Rights
Prior to 5pm on 27 May 2003, the AMP Life Co- Owners irrevocably and unconditionally consenting under the Co-Owners’ Agreements to Westfield Management (or a related body corporate) becoming the Responsible Entity of ART without triggering, and the AMP Co-Owners irrevocably and unconditionally undertaking in writing to Westfield Trust, Westfield Management and each related body corporate of Westfield Management in a legally binding form not to exercise, any Pre-emptive Rights or other rights that they may have (as the case may be) to acquire any ART Properties or interests in ART Properties as a result of either:
- Westfield Management, or a related body corporate of Westfield Management, replacing AMP Henderson as Responsible Entity of ART; or
- the acquisition of ART Units by Bidder.
(iii) No material adverse change
There does not occur, be discovered, be announced or otherwise become public after this Announcement any material adverse change (from that publicly announced to the market before this Announcement) in the business, financial or trading position or condition, assets, liabilities, profitability or prospects of ART and its subsidiary or associated trusts taken as a whole, or any event or action proceeding from a circumstance or change in circumstance, which is reasonably likely to result in a material adverse change (from that publicly announced to the market before this Announcement) of the kind mentioned above.
(iv) Suspension of ART’s dividend reinvestment plan
The operation of ART’s dividend reinvestment plan being and remaining suspended and no ART Units having been issued or agreed to be issued thereunder on or after this Announcement.
(v) No prescribed occurrences
None of the following occurrences (each a “prescribed occurrence”) happening during the period from this Announcement to the date three business days after the end of the Offer Period:
(i) ART converting all or any of its ART Units into a larger or smaller number of ART Units;
(ii) ART or a subsidiary trust of ART entering into a buy back agreement in relation to ART Units or Unitholders resolving to approve the terms of a buy back of ART Units;
(iii) AMP Henderson or a subsidiary of AMP Henderson making an issue of ART Units or granting an option over ART Units or agreeing to make such an issue or grant such an option;
(iv) AMP Henderson or a subsidiary of AMP Henderson disposing or agreeing to dispose, of the whole, or a substantial part, of ART’s business or property;
(v) AMP Henderson or a subsidiary of AMP Henderson charging, or agreeing to charge, the whole, or a substantial part, of ART’s property;
(vi) Unitholders resolving that ART be wound up;
(vii) the making of an order by a court for the winding up of ART or of a subsidiary trust of ART; or
(viii) the appointment of a receiver, receiver and manager, other controller (as defined in the Corporations Act) or similar official in relation to the whole, or a substantial part, of the property of ART or of a subsidiary trust of ART.