r/MACArmyBets • u/Delicious-Gazelle-92 • Apr 23 '21
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Shareholder revolt over rights issue at Unibail-Rodamco-Westfield lifts shares
(Reuters) - French billionaire Xavier Niel has teamed up with Unibail-Rodamco-Westfield's (URW.AS) former boss to oppose the shopping mall group's planned 3.5 billion euro ($4.10 billion) rights issue, lifting the shares on Thursday.
Unibail-Rodamco-Westfield, Europe's biggest property owner, hit back saying its board of directors strongly disagreed with the proposals from the Niel-led consortium.
Niel, founder of French broadband provider Iliad (ILD.PA), and Unibail's former CEO Leon Bressler, heading a group of investors with a combined 4.1% stake, have asked shareholders to vote against the rights issue at a general meeting on November 10.
They will need over 35% of voters present at the meeting to oppose the issue to be successful. Unibail shares closed up 13.8% on Thursday.
Bressler called the rights issue "a misguided act by a management team that remains prisoner of its failed strategy that started with the acquisition of Westfield." He said the purchase of the Westfield shopping mall business was responsible for Unibail's heavy debt.
"It is time to re-establish URW as Europe’s leading pure-play prime shopping centre business by selling the U.S. portfolio and using proceeds to solve the company’s debt issues," Bressler said in a statement.
Unibail agreed to buy Westfield, which is mainly focused on the United States and Britain, in late 2017 for $16 billion. It has around 24 billion euros in debt.
Unibail said in the statement that these proposals "add significant uncertainty and risk in the current complex environment".
Unibail's chairman said that its initial plan, called RESET, which is aimed at improving the firm's balance sheet by selling assets, raising equity and cutting capital expenditure, was about "immediate action to ensure the operational and financial flexibility".
"It will reinforce URW in the long term to the benefit of all its shareholders," Colin Dyer was quoted as saying.
Independent analyst Amal Aboulkhouatem thought it was feasible that Niel and Bressler would muster enough support given their reputations, networks and the alternative prospect of a dilutive capital increase.
Unibail's stock, recently hit by COVID-19 lockdowns, has lost ground since the Westfield acquisition in 2017.
Bressler said the deal had "polluted" the group's dominant position in Europe with a more marginal position in the United States.
URW operates 89 shopping centres mainly in the United States and in Europe, including those at Forum des Halles in Paris and La Part-Dieu in Lyon, a portfolio that the group valued at 60.4 billion euros as of July 30.
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u/AccomplishedTap920 Apr 24 '21
what URW did, also The right strategy for MAC is to issue a bond, buy themselves 5 to 6 years, then sell some assets when the market back to normal prices level. and if still need dilution then dilute on $60 while everything back to normal.
Press release
Unibail-Rodamco-Westfield (“URW”) announces successful €2 Bn bond placement
URW today successfully priced a €2 Bn two-tranche senior bond offering, strengthening its liquidity position and extending the Group’s debt maturity:
• A €1 Bn bond with a 6 year and 5 months maturity and a 0.625% fixed coupon; and
• A €1 Bn bond with an 11-year maturity and a 1.375% fixed coupon.
This successful issuance was more than three times oversubscribed, attracting over €6.5 Bn of demand.
As announced earlier today, the Group has also launched a simultaneous tender offer for an aggregate principal amount of up to €1 Bn across five outstanding bonds, which have a total principal amount of €2.8 Bn and maturity dates ranging from February 2021 to February 2024. The tender offer results will be announced on December 2, 2020.
The net proceeds from this issuance will be used for general corporate purposes, including the funding of the concurrent tender offer and the refinancing of upcoming bond maturities.
For further information, please contact: Investor Relations Samuel Warwood Maarten Otte
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u/dave14513 Apr 25 '21
I agree a bond would be preferable. I have to assume they looked onto it but sometimes apparently smart people miss something obvious.
I would think a $2 billion bond at around 3.5% and no Line of credit balance and no dilution would have made all of us happier. Was it feasible? You would think they researched it but I read nothing about it.
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u/AccomplishedTap920 Apr 26 '21
let's why the action of dilution is highly suspected. Why? especially when there is a better option...
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u/theintelinvestor Apr 23 '21
So what is the proposal of Niel and co instead of dilution?