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Westfield Holdings Purchases Strategic Interest

Westfield Holdings Purchases Strategic Interest In Rodamco North America For A$920 Million

Westfield Holdings Limited today announced it has purchased for A$920 million (€537 million), a 23.9% strategic interest in Rodamco North America (RNA) which has a portfolio of 41 shopping centres in the United States, from ABP, the largest Dutch pension fund.

As a result, Westfield will become RNA’s largest shareholder. The balance of RNA shares are widely held.

The sale of the shares is consistent with ABP’s investment policy to further spread its investments internationally and over a larger number of funds and increase its liquidity. In the light of this policy, in the past five years, ABP has already reduced most of its major shareholdings. This transaction will reduce ABP´s investment in RNA from 30.5% to 6.6%.

RNA is a Netherlands-based company with the characteristics of an Australian listed property trust and is listed on a number of European stock exchanges. RNA has total assets in excess of A$11.5 billion (US$6.3 billion) and a market capitalisation of A$3.2 billion (€1.9 million). It is the third largest regional mall group in the US and is structured along traditional European lines with a Supervisory Board and Management Board.

The Chairman of Westfield, Mr. Frank Lowy said “We are excited with the strategic acquisition which provides the potential to create the premier US shopping centre portfolio. In this regard, we plan to discuss with the Boards of RNA the strategic direction of RNA, appropriate Board representation and Westfield’s ongoing involvement with the company. This will include management, leasing, revenue and capital initiatives, a long-term redevelopment program designed to maximize the portfolio’s potential and a potential merger of RNA and Westfield America Trust’s operations.”

ABP has a long term relationship with Westfield through investments in Westfield managed entities. ABP comments that, with Westfield as a major shareholder of RNA, substantial additional shareholder value will be created for all RNA shareholders. ABP will retain a substantial shareholding in RNA.

Westfield will pay ABP €51.12 per RNA share representing a total cost of A$920 million (€537 million). The acquisition will be funded by: -

 A$450 million equity issue through a bookbuild of Westfield Holdings shares, underwritten by UBS Warburg.

 A Share Purchase Plan raising up to A$60 million. This will provide an opportunity for Westfield Holdings shareholders to participate in the capital raising at the same price as institutions (up to a maximum of A$3,000 per shareholder).

 Existing debt facilities.

The equity raising represents more than 50% of the purchase cost and maintains Westfield Holdings strong balance sheet. The purchase price represents a 10.1% historical earnings yield (based on RNA’s 2000/01 results) and the acquisition will be earnings accretive to Westfield Holdings.

Mr. Frank Lowy said: “We are pleased to further our relationship in this way with ABP, which is a large investor in Westfield Trust in Australia and with Rodamco, which has been a partner in Westfield-managed centres in Australia, the US and Asia since the early ‘90s.”


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