Two expert reports from KPMG and Grant Samuel & Associates have found the planned restructure of Westfield Group (WDC) and Westfield Retail Trust (WRT) is in the best interests of securityholders.
Wesfield Group plans to spin off its Australian and New Zealand business and merge it with Westfield Retail Trust, forming Scentre Group, leaving Westfield Corporation to focus on its international business.
The independent expert report from KPMG said that fair value contributed by Westfield Retail Trust securityholders should be between 51.3% and 51.8% of Scentre Group.
Westfield Retail Trust shareholders will hold 51.4% of Scentre Group under the proposal.
KPMG said the proposal should be assessed as a "merger of equals" and has compelling benefits including an improved corporate governance structure, removal of the potential for conflict of interests and removal of the related party agreements and fee obligations between Westfield Group and Westfield Retail Trust.
The proposal also has key disadvantages that do not outweigh the advantages, including a change in the risk profile of Westfield Retail Trust, reduction in net tangible assets per share, increase in gearing and transaction costs, KPMG said.
The Grant Samuel & Associates report found the proposal was fair and reasonable, saying the relative contribution by Westfield Group shareholders to the formation of Scentre Group should be between 48% and 56%.
Westfield Group securityholders are receiving 48.6% of Scentre Group under the proposal.
The retail and property group has released its securityholder booklet for the proposal and shareholders will vote on the planned merger on May 29.