Australia's Westfield Is in Deal Talks as Mall M&A Spreads

(Bloomberg) -- Westfield Corp., the Australian owner of malls in the U.S. and the U.K., said it’s in talks over a possible deal, in a sign of possible further consolidation in an industry fighting the rise of online retail.

An announcement on the “potentially significant” corporate transaction will be made by Thursday and trading in the shares will be suspended until then, Westfield said in a filing to the local stock exchange. The company plans to hold a press conference in Sydney at 6 p.m.

Founded by billionaire Frank Lowy, Westfield gets almost 70 percent of its $1.8 billion annual revenue in the U.S., where companies are trying to re-purpose struggling brick-and-mortar shopping centers. Mall owners have been targeted by activist investors such as Dan Loeb’s Third Point, who are pushing companies to improve returns.

“There is increased activity globally in the regional mall space in the form of mergers and acquisitions, shareholder activism, and buying from well-known value investors,” JPMorgan Chase & Co. said in a note before Westfield’s announcement. “This activity reflects a sector trading at a material discount to fundamental valuations.”

Westfield shares are headed for their worst year since 2011. Shares have risen about 7 percent since early November amid a wave of takeover talks in the U.S.

Brookfield Asset Management Inc. is seeking to buy the portion of mall owner GGP Inc. it doesn’t already own. New York-based hedge fund Third Point is pushing for change at Macerich Co., including a possible sale, after building a stake in the real estate investment trust, people familiar with the matter said last month.

--With assistance from Matthew Burgess and Tim Smith

To contact the reporter on this story: Vivek Shankar in Sydney at vshankar3@bloomberg.net.

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Edward Johnson

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