Westfield Corp’s move offshore seen as positive
Westfield Corp looks to sever ties with Australia
Westfield Corp’s pending move to list offshore would be positive as long as the stock was included in the Standard & Poor’s 500 index, according to brokers.
On Wednesday, at the group’s first annual general meeting after its restructure last year, Westfield’s chairman Frank Lowy and co-chief executive Peter Lowy, gave a firm indication the group was looking at moving its listing overseas.
Given the lion’s share of the shopping centres are in North America, brokers have said New York could be the likely new home.
“That review is ongoing and we expect to report back with a recommendation by the next annual general meeting,” Peter Lowy said.
After the meeting, the chairman added that “we will look to involve the Australian shareholders in the future of the company”.
Spin-off deal
Last year, following a hard sell, Westfield shareholders approved a deal to spin off the Australian malls into the newly-created Scentre Group and the international malls into Westfield Corp.
In a further move, Westfield Corp has created a “flagship” mall category including Westfield London and Stratford City in the UK, the new World Trade Centre, New York, Century City, Roseville, San Francisco, and Topanga, among others.
UBS’s Grant McCasker said a potential listing in the US would only make sense if included in the S&P500.
“In order to meet the Financial Viability criterion for the S&P500, companies should have four consecutive quarters of positive reported earnings. In late August (ie June 15 accounts), we see Westfield satisfying this requirement.”Mr McCasker said.
“This may be a reason why Westfield is taking time to evaluate the best listing destination. However, given relative pricing to US peers, we do not see substantial upside from a primary listing in the US.”
Using News Corporation’s move to list in the US, UBS says the advantages include enhanced US demand given expected inclusion in major US indices; improved access to a larger pool of capital and reporting requirement consistent with peer groups in the US.
Macquarie Equities said the change to using flagship as a category, could leads to another restructure, by spinning out its regional portfolio from its flagship portfolio.
“As a precedent, Simon Property Group completed the spin-off of its strip and smaller malls in May 2014,” Macquarie’s analysts said.
Westfield’s regional portfolio comprises 23 assets located in the US. In addition, Westfield still has six non-core assets remaining in the US (worth US$1.2 billion) which brokers have include in the regional portfolio.
