DataRoom AM: Westfield replay

Westfield sets a date for a reconvened shareholder vote on its restructure, while the Queensland government plans a hefty asset sell-off.

The $70 billion restructure of Frank Lowy’s Westfield empire remains on shaky ground as a date is set for the resumption of the crucial Westfield Retail Trust shareholder meeting. So will the presence of a plan B push shareholders to back Lowy’s plans?

Elsewhere, the Queensland government opts for asset sales to solve its budget problem, the Solomon Lew-backed Smiggle may be hived off and Healthscope appears likely to join the IPO queue.

A hastily concluded meeting of Westfield Retail Trust shareholders will resume on June 20, with a vote on the Westfield restructure to move forward. The deal reportedly would have fallen just short at last week’s meeting and there appears little sign of sentiment changing in the next fortnight.

While Frank Lowy may be concerned, he has outlined a plan B, threatening to split Westfield Group into two regardless of what happens with the WRT vote. As a result it would leave investors with three Westfield options: WRT, the Australian and NZ operations of Westfield Group and the international operations of Westfield Group. Plan A remains the clearly favoured option for the rich lister, but it is out of Lowy’s hands right now as D-Day Mk II fast approaches.

The Newman government in Queensland is hoping to take advantage of the asset sale incentives put forward by the Abbott government, announcing plans yesterday for a $33.6bn asset sell-off should it retain power at next year’s election.

As part of the divestment spree, Queensland will auction off electricity generators CS Energy and Stanwell as well as the industrial pipelines of SunWater, while long-term leases will be sold for the Gladstone and Townsville ports. Meanwhile, close to $30bn may be recouped by encouraging private backing of electricity distributors ErgonEnergex and Powerlink. Given the way other privatisations have gone of late, the Queensland government can expect plenty of competition and high prices, but the LNP needs to get through the election hurdle first.

Elsewhere, Solomon Lew’s listed retail vehicle Premier Investments has been testing the waters on interest in its Smiggle stationery brand. According to The Australian Financial Review, talks for a spin-off of the company have started, with a $500 million IPO or trade sale on the cards. However, talks are believed to be in their early stages.

One company that appears certain to travel the suddenly well-worn IPO route is Healthscope, with the hospital operator moving towards a $4bn-plus float in July. According to the AFR, research is being prepared to hit fund managers’ desks in a fortnight in a sign the trade sale option is out in favour of an ASX listing.

In other IPO news, Zhaopin, a Chinese firm controlled by ASX-listed Seek, has been valued at about $800m ahead of a listing in the US. Seek plans to sell its stake down from 79 per cent to 67 per cent through the float.

Meanwhile, buyers are lining up to bid for BG Group’s $4bn Queensland gas pipeline but they are likely to be waiting in line for a while as BG holds off on an auction. The AFR reports that a sale may not happen until early next year, with IFM InvestorsHastings Fund Management and AustralianSuper joining Canadian pension funds among the most interested parties.

Finally, Qantas Airways is pursuing its second offering of junk bonds after its first issuance was well received earlier this year. The national carrier is hoping to raise at least $100m.

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