Court delays Westfield's U.S. plans


Westfield founder and chairman Frank Lowy calls Simon and Rouse "natural partners" in his buyout plan for RNA

Geoff Hiscock
CNN Asia business editor

SYDNEY, Australia (CNN) -- A Dutch court has halted a shareholders' vote on the $5.4 billion buyout of Rodamco North America (RNA) by Australian shopping center group Westfield Holdings and two U.S. property companies.

RNA, which owns and manages 36 regional malls in the U.S., has been forced to defer to next month the shareholders' meeting scheduled for Tuesday February 26.

The Dutch Shareholders Association VEB asked the court to delay the meeting, claiming mismanagement by RNA's board in its defense against possible takeovers, and in its employment arrangements for RNA executives.

After the Enterprise Chamber of the Amsterdam Court of Appeal ruled on Friday night that RNA shareholders were not allowed to vote at the meeting, RNA postponed it.

The court also set a hearing date of March 21 for the mismanagement claims.

The court action follows a bruising tussle between Westfield and RNA in the past six months for control of RNA's assets.

Westfield paid $488 million for a 23.9 percent stake in RNA last August and sought to take over the management of RNA's portfolio of U.S. shopping centers.

Alternative offers

But RNA, which is controlled by Dutch group Rodamco, successfully resisted the Westfield move and sought to encourage alternative offers.

That resulted in a three-way offer in mid-January by Westfield and U.S. property companies Simon Property Group and Rouse Co.

Under the revised deal, Westfield's U.S. arm, Westfield America Trust, is to buy 14 regional malls from RNA for about $2.34 billion. Simon and Rouse will split the remaining assets.

In a statement to the Australian Stock Exchange Monday, Westfield Holdings said the meeting of RNA shareholders now was expected to be held "as soon as possible", either before or just after the further court hearing on March 21.

Westfield said no claims were made at the Amsterdam hearing and the court did not issue any ruling in relation to Westfield's shareholder rights.

Completion date

"As previously announced, Westfield will be voting its shares in favor of the transaction," it said.

"In spite of the delay in convening the extraordinary general meeting, Westfield expects that the completion date of the transaction will remain unchanged," the statement said.

Westfield said last month it expected the deal to settle in the second quarter of this year.

Founded by billionaire developer Frank Lowy in 1960, Westfield is one of the biggest shopping center developers in the world.

It now has about $13 billion of assets under management in 87 shopping centers in Australia, New Zealand, the U.S. and the U.K.

Apart from its dealings with RNA, on December 5 Westfield said it would buy nine regional shopping centers from the Ohio-based Richard E. Jacobs group for $756 million.

Joint purchase

On January 14, Westfield, Simon Property Group and Rouse jointly announced they were buying RNA's assets for about $5.4 billion.

Westfield said then the deal, under which it will acquire 14 of RNA's shopping centers, would make it the second-largest such owner in the U.S.

Lowy called Simon and Rouse "natural partners" for Westfield in that both were real estate investment trusts already involved in joint ventures with eight of the RNA properties.

Once the Jacobs and RNA deals are completed, Westfield says it will have 108 shopping centers worldwide, with assets under management of $15.6 billion.

Shares in Westfield Holdings were down 2 percent to $A16.66 on the ASX Monday.