Westfield Group’s share price down, Chairman Lowy’s plans for split postponed

According to Frank Lowy, founder of the largest shopping mall operator in Australia, Westfield Group should separate its global and local businesses. Mr. Lowys plan is to divide the businesses into two separate companies, but his proposal was delayed by the board of Westfield Retail Trust (WRT) because the plan is said to have greatly changed the outlook for the companys shareholders.

As reported by the Financial Times, Richard Warburton, Chairman of Westfield Retail Trust, commented the plan: “I resent the idea that Westfield Group is trying to strong-arm WRT. We want to give people a longer and better opportunity to look at this.”

The vote has been put off for a period of up to two weeks. The Chairmans plan to split the domestic properties of Westfield and leave the company only with its offshore assets in the U.S. and Europe will have to get the approval of at least 75% of the both companies shareholders. As reported by the Wall Street Journal, earlier today the Westfield Group investors had unanimously approved the transition.

Mr. Frank Lowys idea is to bring together the groups operations, which are located in Australia and New Zealand with the trust to create Scentre Group. The new entity will have 37.9 billion Australian dollars (35.1 billion US dollars) of domestic assets under management and will be separate from Westfield Corp., which will hold 26.6 billion dollars of the companys global investments.

Mr. Lowy said: “Losing the vote will not diminish our determination to proceed with Westfield Groups strategic objective of separating the two businesses. We will pursue that separation – but without Westfield Retail.”

Westfield Group was 1.45% down to close at 10.85 Australian dollars per share yesterday, marking a one-year change of -8.21%. According to the information published on the Financial Times, the 12 analysts offering 12-month price targets for Westfield Group have a median target of 1,170.5, with a high estimate of 1,290 and a low estimate of 1,000.00. The median estimate represents a 7.88% increase from the last price of 1,085.