Unibail board rallies to head off activists
Unibail-Rodamco-Westfield’s board has hit back at an activist investor push to scupper a proposed €3.5 billion ($5.8 billion) raising, warning it was the only sure-fire way to defend the European shopping centre giant’s balance sheet against rising challenges in the retail sector.
Shareholders are due to vote next month on the raising which forms a key part of a €9 billion ($14.9 billion) restructure plan, dubbed RESET, that also includes a €4 billion ($6.6 billion) asset sell down.
The activist consortium has taken a 4.1 per cent stake in Unibail and is pushing for support to vote down the severely dilutive raising.
The activists, including French telco billionaire Xavier Niel and former Unibail’s former chairman and chief executive Léon Bressler, blame Unibail’s troubles on its $32 billion buyout of Westfield’s international portfolio three years ago which, they say, burdened the company with too much debt.
A better course of action would be to simply sell off the US portfolio of Westfield malls, which includes trophy assets such as Westfield World Trade Centre in New York and focus on Europe, according to the activists.
Unibail’s board hit back on Tuesday, saying the RESET plan, including the raising, was the “only credible response” to secure Unibail’sfuture over the long-term, “in an environment where the retail world is facing unprecedented challenges with the COVID-19 crisis”.
“The activists’ proposal involves high risk for the company and itsshareholders,” the board said.
“Their plan is based exclusively on large and uncertain disposals, with an undetermined time horizon and at uncertain prices.
“They do not take into account the immediate need to strengthen our balance sheet.”
Australian investors have a stake in Unibail through so-called CHESS Depositary Interests that trade on the Australian Securities Exchange.
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