Company News

Unibail braces for investors clash over mall owner's capital hike

Nov 10 (Reuters) - Shareholders of Unibail-Rodamco-Westfield will decide on Tuesday whether to approve the shopping mall owner’s plans for a 3.5 billion euro ($4.15 billion) rights issue, amid vehement opposition from some high-profile investors.

A rebel consortium, led by French billionaire Xavier Niel and Leon Bressler, the firm’s former CEO, has urged shareholders to vote at a meeting against the capital increase - which management hopes can help pay off debts and shore up its balance sheet.

Retailers have been hit hard by the coronavirus pandemic, with many forced to close during government-enforced lockdowns. Mall owners have also had to help tenants with rent relief.

Unibail, Europe’s biggest property owner, announced the capital increase in September as part of broader restructuring plan, which includes selling off some 6 billion euros of assets.

The rebel consortium, which held a 5% stake as of late October, will need to rally a third of voter support to block the issue.

It will need a simple majority to appoint its three candidates to the supervisory board - namely Bressler, Niel and Catalan businesswoman Susana Gallardo.

The consortium called the issue “completely unnecessary and highly destructive to shareholders” and argued that the firm should sell off its U.S. assets to focus on Europe.

It blamed URW’s 2017 acquisition of Westfield, which is mainly focused on the United States and Britain, for the group’s heavy debt.

Hitting back at the activists, URW has argued its plan was “the only credible response” for the long-term as it tries to protect its credit ratings.

Unibail warned early in November of further costs from new lockdowns in Europe. ($1 = 0.8432 euros) (Reporting by Sarah Morland in Gdansk, Editing by Sarah White and Keith Weir)