The Unibail Rodamco Westfield (ASX: URW) share price is soaring higher today, up 38% in late afternoon trading after posting earlier intraday gains in excess of 44%.
This comes after the company released the results of the votes on 6 resolutions submitted to its shareholders. The results were initially not expected until after the company’s combined general meeting, scheduled for 10 November.
However, due to the COVID-19 pandemic, shareholders voted remotely, and the vote closed early.
Today’s surge will come as welcome news to longer-term shareholders, who watched Unibail’s share price fall by 75% from 2 January through to yesterday’s trading. Even after today’s stellar gains, the share price still remains down 65% in 2020.
What does Unibail Rodamco Westfield do?
Unibail is one of Europe’s largest commercial real estate companies, owning a portfolio of quality retail and office complexes. It has assets in Europe, the United Kingdom and the United States.
Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the ASX. The company makes up part of the S&P/ASX 200 Index (ASX: XJO).
What’s driving the Unibail share price leap up?
In an announcement released to the ASX this morning, Unibail revealed the results of its shareholders’ votes on 6 resolutions put to them.
But it’s likely only one key result that’s really spurring today’s share price gains.
Unibail reported that shareholders had rejected the management board’s resolution to issue ordinary shares with preferential subscription rights. The proposed 3.5 billion euro capital raising was intended to pay down the company’s significant debt obligations, as part of what it calls the ‘RESET’ plan.
While other aspects of the plan – including asset disposals and a reduced cash dividend – can go forward, the capital raising will not.
Addressing the outcome, Group CEO Christophe Cuvillier said:
We take note of the shareholders’ votes expressed in view of the Shareholders’ General Meeting of November 10, notably regarding the proposed capital increase, which did not gather the required two-third majority.
The Group and our industry are going through a period of uncertainty and disruption; the announcement of a possible first global vaccine against COVID-19 is the most recent illustration of this. This medical breakthrough is tremendous news for all and marks a major step in the global fight against the pandemic. Subject to the approval of the next clinical steps, this could have a significant positive impact on retail real estate in general, on URW in particular, especially on our operations and the completion of our disposal plan.
With the capital raising off the radar and a promising potential vaccine in the near-term pipeline, the Unibail share price is one to watch.