Westfield, the world’s biggest shopping centre owner by market capitalisation, is expected to confirm plans to spin off its Australian retail assets into a separate company from its business in the UK and US, and raise more than A$3bn ($3bn) in an equity offer.
The Sydney-based group on Tuesday halted trading in its shares after noting media speculation about “potential transactions”.
Two sources close to the situation said Westfield’s Australian operations would be put into a separate vehicle from the US and UK shopping malls.
Westfield is expected to reveal details for an equity offer to raise between A$3bn and A$3.5bn, according to one person involved. The company plans to use the capital raised for expansion and acquisitions. Citigroup, Credit Suisse and Morgan Stanley are understood to be working with Westfield on the equity raising. All three declined to comment.
Analysts said that the group did not need the additional capital, although it would be useful to fund Westfield’s expansion plans in Australia. It comes at a time when Centro, a heavily indebted Australian-listed shopping mall owner, is selling assets to improve the health of its balance sheet. Westfield is understood to be interested in some of these assets.
The group last week opened the first stage of its A$1.2bn Westfield Sydney redevelopment project six months ahead of schedule.
Julia Clarke, Westfield spokeswoman, declined to add to the group’s official announcement. “There is no comment from this office in relation to the market speculation,” she told the Financial Times.
The UK has become a more marginal market for the group after it stopped work on most of its schemes except the Stratford shopping centre in London, due to the credit crunch. Westfield is in the late stages of talks about selling a stake in the centre to a fund being set up by Henderson Global Investors. Westfield operates a portfolio of 119 regional shopping centres in Australia, New Zealand, the US and UK that it values at more than A$61bn. It is led by Frank Lowy, executive chairman and co-founder, whose sons are also in the business.
Westfield began its life as a public company in 1960 when it listed on the Sydney Stock Exchange. It has grown into one of Australia’s largest corporations by market capitalisation and has become a world leader in retail property.
Shares in the group rose 24 cents, or nearly 2 per cent, to A$12.81 before trading was halted.
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