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Westfield’s Peter Allen to ease breakup concerns

Concerns continue to mount regarding the breakup of Westfield’s (ASX: WDC) domestic and international assets with Westfield Retail Trust (ASX: WRT) shareholders questioning the value of the deal.

Under the arrangement, Westfield Group’s and Westfield Retail Trust’s Australian and New Zealand assets will be combined to form a new company to be known as Scentre, just as Westfield’s international assets will also combine to form Westfield Corporation. Although there is logic behind the proposal, investors in Westfield Retail Trust have allegedly assessed the deal as misleading, believing that they may be overpaying for the business.

Whilst one of the reasons behind this belief may be that Westfield’s founding family will exit from the Australian holdings altogether, others may argue that the net tangible asset value is far too great. Westfield Group values the platform at $3.5 billion even though Scentre’s projected $230 million of annual income implies a value between $2.5 billion and $3 billion when based on a lower stock price.

As reported by The Australian Financial Review, Westfield’s chief financial officer Peter Allen will attempt to ‘woo’ investors by embarking upon a charm offensive to ease these concerns.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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