-- Lowy family sells 7.1% stake in Westfield Retail Trust
-- Spokesman says family is "diversifying its investments"
-- Shares sold at A$3.09 each; a 2.8% discount to closing
price
(Recasts to provide background on Westfield, Lowy family
throughout; fund manager comment in ninth and tenth
paragraphs.)
By Gillian Tan and Ross Kelly
SYDNEY--The founding family of Westfield Group (WDC.AU), which
owns more than 100 malls globally, has raised 663.7 million
Australian dollars (US$681.6 million) by selling its stake in a
trust created to hold more mature assets in Australia and New
Zealand.
A spokesman for the Lowy family provided scant detail on why it
had sold its entire 7.1% holding in the Westfield Retail Trust
(WRT.AU), a separately listed company created just over two years
ago to hold interests in dozens of Westfield-branded malls.
"The sale was made as part of a broader investment strategy to
diversify its investments internationally," the Lowy Family
spokesman said in a statement Thursday. It didn't elaborate.
Westfield's first mall was opened by current Chairman Frank Lowy
and business partner John Saunders in 1959 in the western Sydney
suburb of Blacktown. The company was floated on the Australian
Stock Exchange in 1960 and now owns malls or mall developments in
the U.S., U.K., Australia, Brazil and Italy.
It spun off half of its Australian and New Zealand assets into
the Westfield Retail Trust in December 2010 to raise as much as
US$3.5 billion to invest in larger projects including the new World
Trade Center retail development in New York, and provide
flexibility to expand in emerging markets such as Brazil.
The Lowy family's stake in Westfield Retail Trust was being sold
late Thursday to institutional investors through a process run by
UBS, a person familiar with the matter said.
The stake was sold to UBS at A$3.09 a share in a block trade
after the market closed. That represents a 9 cent discount to
Westfield Retail Trust's A$3.18 closing price in Sydney, but is
nevertheless higher than the original price at the time of its 2010
listing of A$2.75.
The spokesman said the Lowy family's 8% interest in the larger
Westfield Group, the largest of any shareholder, remains unchanged
as does its "continuing commitment" to the company.
The Lowy family is well known for its philanthropy, including
the establishment of the Lowy Institute, a foreign policy think
tank based in Sydney. Frank Lowy also led Australia's failed bid to
host the 2022 soccer World Cup.
"I'm not surprised to see the family selling their stake in
Westfield Retail Trust. It's logical because they've historically
held their stake in the more active business," said Stuart
Cartledge, managing director of fund manager Phoenix Portfolios,
which owns shares in both Westfield Group and Westfield Retail
Trust.
"The trust is still trading at a discount to the value of the
underlying assets, so it's still an attractive price to us," Mr.
Cartledge added.
Westfield Retail Trust this week booked a 2.2% fall in 2012
annual profit to A$572.6 million, underperforming an 18% profit
jump at Westfield Group that was driven by the London Olympics
boosting traffic through its malls and stronger U.S. consumer
confidence.
Bank of America Merrill Lynch earlier Thursday upgraded
Westfield Retail Trust to a buy recommendation with a A$3.30 price
target due to its attractive dividend yield and steady earnings
potential, while Credit Suisse cut it to a neutral call with a
target price of A$3.31.
Write to Gillian Tan at gillian.tan@wsj.com and Ross Kelly at
ross.kelly@wsj.com
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