Westfield takes stake in Rodamco arm

SYDNEY, Australia -- Australian shopping center developer Westfield Holdings will pay $488 million for a 24 percent stake in Dutch-based property group Rodamco North America NV, it said Monday.

The Australian group hopes to take over the management of RNA's portfolio of 41 U.S. shopping centres, eventually merging it with its own Westfield America Trust operations, according to Reuters.

But Rodamco's initial reaction has been lukewarm.

"There was no red carpet rolled out for us, but we believe very much it is going to happen," Westfield founder and chairman Frank Lowy told reporters via video link from Amsterdam.

Shares in RNA rallied 6.8 percent to 45.75 euros at the start of European trade. Westfield shares were halted from trade on Monday. They closed at A$14.70 on Friday.

Pension fund for $488m

Westfield said the purchase of the RNA stake from ABP, the Netherlands' largest pension fund, would be financed by a mix of equity funding and debt from existing facilities.

Westfield said it now ranked as the biggest shareholder in RNA after paying ABP 51.12 euros for each share, cutting the pension fund's stake in RNA to 6.6 percent from 30.5 percent.

Westfield manages shopping centers in Australia and New Zealand and also has a portfolio of 39 malls across the United States.

Analysts said the deal looked positive for Westfield but there was no guarantee a merger of the U.S. assets would be achieved.

Lowy said Westfield planned to discuss the strategic direction of the company with the board of RNA, which it ranks as the third largest regional mall group in the United States with a market capitalization of about $1.7 billion.

Lowy ranks as Australia's second richest man behind Kerry Packer, with a personal fortune of Aust. $3.5 billion, according to BRW magazine.

Reuters contributed to this report.