12 October 2004 – Jim Pickard and Virginia Marsh Financial Times
Two Australian companies, Westfield and Multiplex, have joined forces with the Reuben brothers to make a £585m joint offer for Chelsfield, the privately-held property group.
The move brings to a close a month-long bidding war between the two Australians and will lead to Chelsfield’s break-up 18 years after it was founded by Elliott Bernerd.
The consortium – which hopes to unviel a formal cash offer as early as Thursday – values the business at the same level as a solo approach from Westfield two weeks ago.
The takeover comes less than six months after Chelsfield was taken private by the Duelguide consortium which includes Mr Bernerd, the Reuben brothers, and HBOS, the bank. The £404m they paid for the business then means they have since made a 45 per cent profit.
Multiplex, Australia’s biggest construction company, had been considering making its own bid for Chelsfield. Instead, it will divide the group’s assests with Westfield, the world’s biggest shopping mall operator.
Multiplex already holds 6 per cent of the Duelguide consortium. David and Simon Reuben hold a further 54 per cent and could have used that to block a full takeover.
The Australian companies said they had secured acceptances fro their joint bid from shareholders controlling a further 24.3 per cent.
Mr Bernerd will continue to work for the company as an external consultant.
Peter Lowry, managing director of Westfield, said his company would resume its initial solo offer if the joint bid was unable to proceed.
“We are prepared to buy the whole company, if this bid does not come off.” he said.
The planned deal is a significant step for the Australian groups, both of which are set to expand internationally and in the UK in particular.
Westfield said it would invest a further £1.8bn in development opportunities in the UK through the partnership with Multiplex and the Reubens.
The division of assets envisaged by yesterday’s proposal would leave Westfield in control of the Merry Hill shopping centre in the West Midlands.
It also owns 25 per cent stakse in White City, which will be London’s biggest shopping mall development, and in Stratford City, the proposed East London retail and leisure centre.
Multiplex and the Reubens will also have a 50 per cent interest in Stratford and a 25 per cent stake in White City – where Multiplex is the developer.