WFD Westfieldc Stapled

By Mike Cherney 

SYDNEY--Shareholders at Westfield Corp., which runs marquee malls across the U.S., approved a takeover by Europe-based shopping-center company Unibail-Rodamco SE, putting to rest lingering concerns that the declining value of the offer might kill the deal.

Since the deal was announced in December, a slide in Unibail-Rodamco shares and changes in foreign-exchange rates reduced the value of the stock-and-cash offer, originally nearly $16 billion, by more than $1 billion. But it still represented a premium over the current price of Australia-listed Westfield shares, and the deal breezed to approval Thursday, with 97.5% of shares in favor. It had already been approved by Unibail shareholders and Australia's Foreign Investment Review Board.

Mall owners globally are joining forces to face the growing threat from e-commerce. Westfield had been reducing its retail exposure in favor of residential and entertainment properties, and had focused on big, glitzy malls that have proved more successful at attracting shoppers.

The combined company will have a portfolio valued at more than $70 billion and will include new malls such as the one at the World Trade Center in New York and others like Century City in Los Angeles, which just underwent a major expansion.

" Unibail is a very good company, very well-run, they'll just keep going down the path that we were on before," Peter Lowy, co-CEO of Westfield, said in a brief interview after the shareholder vote.

The key challenge will be to "keep the mall relevant," Mr. Lowy said. Consumers must feel that "they're not just coming to shop, they're coming to an environment. And giving them an experiential visit rather than just a shopping visit."

Malls have turned to gyms, restaurants and spas to attract customers who are increasingly shopping online for other goods, especially apparel.

In midafternoon trading Thursday, Westfield shares traded at 8.79 Australian dollars (US$6.64), down nearly 0.7% on the day. The Unibail-Rodamco offer worked out to about A$9 recently, down from A$10.01 in December. The takeover is due to complete on June 7.

At the shareholder meeting in downtown Sydney--held in an ornate room in a 19th-century building that is the equivalent of city hall--Westfield Chairman Frank Lowy bid farewell to investors after a roughly 60-year career in retail. He co-founded Westfield, which publicly listed in 1960. Two of his sons, Peter and Steven, are co-chief executives, and another, David, was previously involved in the company.

In an emotional speech, the elder Mr. Lowy, a Holocaust survivor, recalled arriving in Sydney in 1952.

"The feeling of freedom was overwhelming," he said. "No one asked me what my religion was. No one was chasing me, and I did not have to hide."

The Lowy family will own roughly 2.5% of the combined company, and Westfield shareholders overall will have 28%. Peter Lowy will join Unibail's supervisory board. Steven Lowy will be chairman of OneMarket, Westfield's retail-technology unit, which is being spun off and will publicly trade on the Australian Securities Exchange.

The Lowys made clear at Thursday's meeting that OneMarket's success isn't guaranteed, and cautioned that it faces different risks than a traditional real-estate company. Its early products include an electronic-receipt service; among its clients are Nordstrom Inc. and Unibail, which will have a stake.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

May 24, 2018 02:58 ET (06:58 GMT)

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