Westfield owner’s shares leap amid rights issue fight

Unibail-Rodamco-Westfield’s locally listed CDI units jumped by nearly 13% amid a shareholder revolt over a rights issue.

The Westfield shopping centre in Parramatta in Sydney. Picture: Getty Images

French company Unibail-Rodamco-Westfield is facing a shareholder revolt over its plans to undertake a €3.5bn rights issue with dissident shareholders calling for a company break up.

News of the plan prompted a leap in Unibail-Rodamco-Westfield’s locally listed CDI units and they were up by 12.75 per cent to $3.36 in early morning trade as investors welcomed an alternative to the heavily discounted equity raising.

The mall company has been slugged by the coronavirus crisis and last month unveiled the plans for the raising as part of a broader €9bn turnaround plan, including asset sales.

But French billionaire Xavier Niel, allied with Unibail’s former chief executive Leon Bressler, is urging shareholders to vote against the planned rights issue.

They are leading an investor group with a combined 4.1 per cent stake and need more than 35 per cent of voters to oppose the rights issue for it to be called off.

They have dubbed the rights issue “a misguided act by a management team that remains prisoner of its failed strategy that started with the acquisition of Westfield.”

The dissidents said buying the international Westfield shopping mall empire, in a $32bn deal struck by Sir Frank Lowy as he exited the industry in 2018, was to blame for Unibail’s heavy debt burden. Mr Bressler proposed selling the US portfolio - made up of Westfield centres in New York and other key cities - and using proceeds to slash debt.

The company said it would engage in a constructive and open dialogue with its shareholders. But its supervisory board said it “expresses its strong disagreement with these proposals, which add significant uncertainty and risk in the current complex environment”.

The board reiterated its commitment to the existing turnaround scheme, calling it a comprehensive and well-calibrated plan, which resulted from “an in-depth review of the group’s strategic options”.