Investors have handed down their first assessment of the new companies born from the contentious $70 billion restructure of the Westfield shopping centre empire.
Shares in the Australia and New Zealand-focussed Scentre Group dropped from an opening price of $3.21 a share to $3.08 by 2:44pm (AEST) on their market debut, while the new international business – Westfield Corporation – has risen from a starting price of $6.70 to $6.96.
Scentre Group was formed by merging Westfield Group’s Australasian businesses with Westfield Retail Trust, while Westfield Corporation will run the firm’s malls in the US, the UK and in Europe.
The restructure will see the Lowy family exit the management of Westfield’s Australian malls.
An overwhelming majority of nearly 98 per cent of Westfield Group shareholders had approved the complex restructure plan.
Last week, shareholders in the retail trust narrowly approved the deal at their second attempt, voting 76.09 per cent in favour, just over the 75 per cent of votes required.
The first vote for retail trust investors was abandoned in chaotic scenes after company founder Frank Lowy warned the restructure would go ahead even if they voted it down, thereby creating a firm that would compete with the trust.
Proxies received before that first meeting showed the plan had garnered just 74 per cent of votes, falling short of the 75 per cent hurdle.
Shareholder groups had expressed concerns that the vote was conflicted, with Australian Shareholders’ Association spokesman Stephen Mayne saying investors in Westfield Group stood to gain more from the deal.
“The reason this deal got over the line is that the majority of Westfield Retail shareholders actually have a bigger stake in Westfield Group, the parent company,” Mr Mayne said.
“So they didn’t care that Westfield Retail shareholders were getting done over, because they were on the beneficiary side with the parent company.
“So that’s where there was a fundamental conflict of interest in the mandate that was delivered.”
Frank Lowy will be the chairman of both new firms, but his sons Peter and Steven will join the management team of Westfield Corporation.