WRT proxy vote falls short

$70bn proposal fails to win support from proxy votes, shareholders on floor still to vote.

Westfield's restructure plan is on a knife edge, with indications that support from proxy votes will fall short.

Some 74.1% of proxy votes are in favour of the proposal, short of the 75% needed, with the vote to come down to shareholders on the floor, The Australian Financial Review reports.

Westfield Group founder Frank Lowy has had a heated exchange with shareholders ahead of a crucial vote on the company's $70 billion restructure plan, with the chairman accused of attempting to strong-arm investors into supporting the move.

The plan to split Westfield's Australasian and offshore businesses cleared its first hurdle this morning with Westfield Group shareholders voting in favour of the move, as expected.

The Australian reports 97.26% of Westfield shareholders voted in favour of the restructure, after 98% of proxy votes backed the proposal.

According to the newspaper, Mr Lowy was surprised by the discrepancy and told the meeting he didn’t know where "that%" had gone.

But the real test will come when investors in Westfield Retail Trust, a joint owner of the Australasian business, vote on the plan on this afternoon.

Shares in Westfield and WRT have been placed in a trading halt ahead of separate shareholders meetings today to vote on the proposal.

Westfield Group wants to merge its Australian and New Zealand business with those of the separately listed WRT to create a new entity, Scentre.

Westfield Group's international business would become Westfield Corporation.

Earlier, Mr Lowy said a vote of WRT investors is "too close to call" but insisted Westfield would pursue the separation of the two businesses, with or without WRT's support.

"If the WRT meeting this afternoon does not approve the proposal, it will not diminish our determination to proceed with WDC’s strategic objective of separating the two businesses," he said.

"We will pursue that separation - but without WRT. However, the existing relationship with WRT will continue."

Mr Lowy said WRT shareholders were entitled to object to the proposal and that if it is rejected by the group a new version of the demerger will be pursued.

"We will begin that process immediately and I expect the revised plan to be presented to securityholders by the first quarter of next year," he said.

The Australian reported yesterday that 25.3% of votes already cast by WRT shareholders were against the proposal, according to fund managers.

Westfield needs to secure the support of 75% of shareholders who vote in order to be successful.

WRT, which was spun off by Westfield Group in 2010, is a joint owner of the Australasian shopping centres.

Lowy under fire from ASA

In a fiery meeting this morning, Australian Shareholder's Association representative Stephen Mayne accused Mr Lowy of running an "oppressive" campaign to get the deal across the line.

Mr Mayne criticised Mr Lowy for revealing he would seek to demerge Westfield's Australian business if the restructure plan was rejected by WRT shareholders.

"It's oppressive and it shouldn't be happening," Mr Mayne said to Mr Lowy.

Mr Lowy responded by telling Mr Mayne he was living in "dreamland".

"Your characterisation is absolutely wrong," Mr Lowy said.

"You're in dreamland to say this is being done in an oppressive way."

Mr Mayne later said Mr Lowy was out of line to tell shareholders he would pursue the split, by creating a competing investment vehicle to WRT, before the result of Thursday afternoon's vote was known.

"I'm suggesting he's tying one last desperate attempt to strong-arm Westfield Retail shareholders to accept an unattractive offer," Mr Mayne told AAP.

Such a move would be bad value for WRT investors, he said.

The restructure plan faces stiff opposition from the Australian Shareholders' Association and Westfield's major investor, UniSuper, as well as other large institutions such as Colonial First State and Phoenix Portfolios.

The ASA argues the proposed split favours Westfield Group to the detriment of WRT investors.