DataRoom AM: Lowy’s sweetener

Frank Lowy finally gives in to shareholders ahead of a crucial vote for Westfield’s restructure, while Woolworths’ credit card partnership with HSBC comes to an end.

Frank Lowy has yielded to the demands of Westfield Retail Trust shareholders by altering the details of the property giant’s mammoth restructure. With the deadline for the shareholder vote fast approaching and the likelihood of a successful vote dissipating, Lowy really had no other choice.

Elsewhere, Macquarie Bank acquires HSBC’s Woolworths-linked credit card portfolio, America’s largest hospital operator jumps into the front seat for Healthscope and another infrastructure asset readies for a buyer frenzy.

Frank Lowy held out for as long as he could on his preferred plans for the $70 billion reshaping of his property empire, but something had to give in the end. With a crucial shareholder vote on May 29 seemingly tilting towards a major disappointment, Lowy has sweetened the offer made to shareholders of Westfield Retail Trust to the tune of $300 million.

The structure of the deal will be left untouched, with Westfield Group and Westfield Retail Trust to merge and then split into the Europe and US-focussed Westfield Corporation and the Australia and New Zealand-focussed Scentre. The revised proposal will result in an easing of concerns around the debt load of Scentre, with the net debt of the newly formed group to be cut from $7.1bn to $6.8bn.

Six years after teaming with Woolworths for the retailer’s first foray into the credit card market, HSBC Australia has divested its interest in the joint venture. Overnight UK-based HSBC said its Woolworths white label credit card portfolio would be transferred to Macquarie Bank for an undisclosed fee.

The assets had a value $362m at the end of the last quarter and the deal is expected to close in June.

Meanwhile, the race for Healthscope may soon be won, with US-based HCA Holdings believed to have edged out rival bids from China’s Kosun and Malaysia’s IHH through a $5bn offer. However, the deal may still be one month from wrapping up as owners Pacific Equity Partners continue to weigh whether an IPO could recoup a greater return.

Infrastructure is hot property in Australia with buyers clamouring for a piece of any and every infrastructure asset going on the market at the moment. Governments around the country are tipped to further cash in over the next couple of years, but so too is Glencore Xstrata and its partners in the $2.6bn Wiggins Island Coal Export Terminal. Chairman of the development John Massey yesterday said a sell-off by the consortium was likely in what is clearly a seller’s market. Offers have already been received, but a final decision has not yet been made.

In property, Singapore-listed Frasers Centrepoint has paid LaSalle Investment Management over $200m for the Sofitel Sydney Wentworth, according to The Australian Financial Review. LaSalle paid $130m for the property in 2010.

Elsewhere, online classifieds group Seek is planning to float Chinese subsidiary Zhaopin in the US. Details of the listing on the New York Stock Exchange remain scarce, however, with details of the amount sought and timing of the IPO still unknown. Based on the price Seek paid to increase its stake in Zhaopin to 78 per cent last year, a float that values the firm at upwards of $600m can be expected.

In aviation, Archer Capital has entered exclusive talks to buy Aero-Care with the owner of the baggage handler, First Capital. A $200m agreement is likely to be signed next week, the AFR said.

Finally, the Foreign Investment Review Board has as expected approved the $2.15bn takeover of David Jones by South Africa’s Woolworths, while rich-lister Andrew Forrest has acquired a further two million shares in Fortescue Metals at a cost of close to $10m.