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Battle of the giants for Liberty as both Simon & Westfield build stakes
Shopping centre developer and manager Westfield Group has taken a 2.96% stake in Liberty International Plc for "investment purposes".
Westfield, the world's largest listed retail property group, said it had acquired 10.7 million ordinary Liberty shares at an average price of 853 pence per share for a total of £91m.
Liberty specialises in shopping centres, which comprise around 75% of group assets, which total around £4.7 billion.
Westfield Group, which is capitalised at around A$32.46 billion, said it informed the Australian Securities Exchange in response to "enquiries".,
News of the stakebuilding comes as Credit Suisse upgraded the company to 'neutral' from 'underperform'. The upgrade comes on the same day the shopping centre owner announced that US shopping centre REIT Simon Property Group, the largest public US property company, had brought its holding in the company past 4%.
The news sent Liberty’s shares up 8% to 945p, with analysts suggesting that Simon’s interest could be a precursor to a takeover bid, an idea that will be further fuelled by news of Westfield’s stake.
On Friday JP Morgan property analyst Harm Meijer said: ‘We believe one possible way of looking at this is that Simon Property’s stake is not a short-term trading transaction and may eventually result in a takeover bid.’
Merrill Lynch equities director Sarah Cooper said: ‘Both groups have now clearly pulled up a seat at the table. They could either be working together & looking to divide up the assets, or this move by Westfield could be a defensive move to try & keep new entrants out of this market.
‘The key question now is who can afford it. Simon has $782m (£425m) cash & anywhere from $450-$500m (£244-£272m) of free cash flow per year. Additionally, the company issued unsecured debt in May at very affordable rates.’
Westfield, the world's largest listed retail property group, said it had acquired 10.7 million ordinary Liberty shares at an average price of 853 pence per share for a total of £91m.
Liberty specialises in shopping centres, which comprise around 75% of group assets, which total around £4.7 billion.
Westfield Group, which is capitalised at around A$32.46 billion, said it informed the Australian Securities Exchange in response to "enquiries".,
News of the stakebuilding comes as Credit Suisse upgraded the company to 'neutral' from 'underperform'. The upgrade comes on the same day the shopping centre owner announced that US shopping centre REIT Simon Property Group, the largest public US property company, had brought its holding in the company past 4%.
The news sent Liberty’s shares up 8% to 945p, with analysts suggesting that Simon’s interest could be a precursor to a takeover bid, an idea that will be further fuelled by news of Westfield’s stake.
On Friday JP Morgan property analyst Harm Meijer said: ‘We believe one possible way of looking at this is that Simon Property’s stake is not a short-term trading transaction and may eventually result in a takeover bid.’
Merrill Lynch equities director Sarah Cooper said: ‘Both groups have now clearly pulled up a seat at the table. They could either be working together & looking to divide up the assets, or this move by Westfield could be a defensive move to try & keep new entrants out of this market.
‘The key question now is who can afford it. Simon has $782m (£425m) cash & anywhere from $450-$500m (£244-£272m) of free cash flow per year. Additionally, the company issued unsecured debt in May at very affordable rates.’
Tue, 26th Aug 2008