Australia's Westfield sells U.S., UK malls; to buy back shares

Tue Feb 14, 2012 7:39pm EST
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By Eriko Amaha

SYDNEY (Reuters) - Australian shopping mall owner Westfield Group WDC.AX is selling a stake in a portfolio of 12 U.S. malls to a Canadian pension fund for about $1.85 billion, freeing up cash to fund a share buyback and to expand its global reach.

Westfield, the No.2 mall owner globally, said on Wednesday it was forming a $4.8 billion joint venture with Canada Pension Plan Investment Board (CPPIB) and announced a buyback of 10 percent of its stock, sending its shares up 6 percent to a seven-month peak.

Westfield also said it had sold its interest in three shopping centres in the United Kingdom for A$240 million ($256 million).

The deals are the latest move by Westfield to reinvent itself after spinning off stakes in its Australian malls in 2010 to free up capital and earn greater returns from property management and higher yielding mall development.

Westfield has also ventured into new markets Brazil and Italy in a bid to find growth outside of Australia and the United States, while it looks to sell less productive shopping malls.

Under the U.S. joint venture, CPPIB will pay Westfield about $1.85 billion become a 45 percent partner in a portfolio of 12 malls that Westfield owns.

The deal represents the largest real estate investment ever for CPPIB, one of the world's largest private equity investors.

Westfield operates 118 shopping malls in Australia, New Zealand, the United States, Britain and Brazil.   Continued...