PARIS – Unibail-Rodamco-Westfield on Thursday rejected requests by a shareholder consortium that includes French billionaire Xavier Niel to drop its € 3.5 billion rights issue plan and get rid of it instead. its American shopping centers.
The supervisory board, which met on Thursday, “expresses its deep disagreement with these proposals, which add significant uncertainties and risks in the current complex environment,” URW said in a statement.
Niel, a well-known telecom entrepreneur in France, has teamed up with Leon Bressler, former CEO of Unibail, and they together own 4.1% of the company’s shares.
Shareholders said the planned rights issue would be “severely dilutive”, calling it “a misguided act on the part of management which remains trapped in a failed strategy that began with the Westfield acquisition”.
Shareholders want the company to refocus on its core European shopping centers and sell its US stakes.
“Removing URW from its US portfolio will generate superior performance over the long term, to the benefit of all stakeholders,” they said.
URW’s supervisory board fired back, saying it unanimously supported the real estate company’s strategic plan, dubbed “reset”, which, in addition to the capital raised, involves the sale of € 4 billion of real estate in Europe – half shops and half offices – by the end of next year. He cited the recent sale for 620 million euros of an office building that houses Nestlé’s head office in the Paris suburbs as proof that he is moving forward with his plans.
“The reset plan is about immediate action to ensure the operational and financial flexibility of the group,” said the real estate company.
URW was formed when the French real estate company bought Westfield for nearly $ 25 billion in 2018. At the time, mergers were seen as a key form of defense for shopping center operators struggling to cope with the drop in foot traffic as consumers turned to digital means to shop. The struggling industry has suffered another blow with the coronavirus pandemic, which has spooked shoppers in physical stores and sped up online shopping.
Since purchasing Westfield and its properties in London, New York and San Francisco, Chief Executive Officer Christophe Cuvillier has steered the company to prime locations, keeping them alive with new brands and frequent renewal of tenants. He also promoted mixed-use sites and consumer data, collecting it globally, which helped expand the business of local malls.
The company reported € 1.06 billion in rental income in the first half, a decrease of 15.1%.
URW will hold its annual meeting of shareholders on November 10.
