Westfield founder Frank Lowy has had a heated exchange with shareholders ahead of a crucial vote on the company’s $70 billion restructure plan, with the chairman accused of attempting to strong-arm investors into supporting the move.
The plan to split Westfield’s Australasian and offshore businesses cleared its first hurdle on Thursday morning with Westfield Group shareholders voting in favour of the move, as expected.
The real test will come when investors in Westfield Retail Trust, a joint owner of the Australasian business, vote on the plan on Thursday afternoon.
In a fiery meeting on Thursday morning, Australian Shareholder’s Association representative Stephen Mayne accused Mr Lowy of running an “oppressive” campaign to get the deal across the line.
Mr Mayne criticised Mr Lowy for revealing he would seek to de-merge Westfield’s Australian business if the restructure plan was rejected by WRT shareholders.
“It’s oppressive and it shouldn’t be happening,” Mr Mayne said to Mr Lowy.
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Mr Lowy responded by telling Mr Mayne he was living in “dreamland”.
“Your characterisation is absolutely wrong,” Mr Lowy said.
“You’re in dreamland to say this is being done in an oppressive way.”
Mr Mayne later said Mr Lowy was out of line to tell shareholders he would pursue the split, by creating a competing investment vehicle to WRT, before the result of Thursday afternoon’s vote was known.
“I’m suggesting he’s tying one last desperate attempt to strong-arm Westfield Retail shareholders to accept an unattractive offer,” Mr Mayne told AAP.
Such a move would be bad value for WRT investors, he said.
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Under the restructure plan being voted on, Westfield’s Australian and New Zealand businesses would merge with WRT to create a new entity, to be called Scentre.
Westfield Group’s international business, which includes malls in Great Britain and at the World Trade Centre in New York, would become Westfield Corporation.
The approval of at least 75 per cent of WRT shareholders is needed for the plan to proceed.
Speaking at the Westfield Group annual general meeting on Thursday, Mr Lowy said the result of the WRT vote later in the day would be close.
“At this stage it is very hard to predict the result,” he said.
The restructure plan faces stiff opposition from the Australian Shareholders’ Association and Westfield’s major investor, UniSuper, as well as other large institutions such as Colonial First State and Phoenix Portfolios.
The ASA argues the proposed split favours Westfield Group to the detriment of WRT investors.
“It is clear that there is a minority of WRT investors who, for various reasons, have said they do not agree with the proposal,” Mr Lowy told the Westfield Group AGM.
“That is of course their right.
“They are entitled to their opinion and I respect that.”
Shares in Westfield Group and WRT remain in a trading halt while the votes are held.
