Why are Westfield Group shareholders also against its corporate restructure?

A recent survey shows that the group’s management has a significant battle on its hands.

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A new survey undertaken by brokerage firm CLSA suggests that investors in shopping centre behemoth Westfield Group (ASX: WDC) are just as opposed as Westfield Retail Trust (ASX: WRT) investors to the corporate restructure that was proposed on December 4 last year.

Shareholders of the Trust are largely opposing the deal based on the enormous $1.8 billion management costs the new Scentre vehicle would be responsible for, but it seems that many security holders in the Group would also vote “no”. According to the survey, 58% of the Trust’s investors and 55% of Westfield Group’s shareholders are against the proposal based on today’s terms.

While the deal is believed to be tilted quite heavily in the Group’s favour, the question must be asked why its shareholders would be against the proposal? This is likely because many of the shareholders in the group also hold the Trust’s securities.

Foolish takeaway

A vote will be held on May 29 which will require a 75% approval rate for the proposal to proceed. It is widely believed the deal will need to be sweetened more in the Trust’s favour in order to win over more votes.

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