Unibail-Rodamco-Westfield, the largest property owner in Europe, is facing opposition from a group of shareholders led by French billionaire Xavier Niel. This group, which includes former Unibail CEO Leon Bressler, holds a combined 4.1% stake in the company and is urging other shareholders to vote against the planned €3.5 billion rights issue at a general meeting on November 10. In order for the opposition to succeed, they will need over 35% of voters present at the meeting to oppose the issue.

The announcement of this opposition caused Unibail shares to surge, with a 13.8% increase on Thursday. However, on Friday, the shares dropped by almost 4%. Bressler criticized the planned rights issue, stating that it is a misguided action by the management that has failed to address the heavy debt incurred from the acquisition of the Westfield shopping mall business in 2017. According to Bressler, the company should sell its US portfolio to alleviate its debt issues and refocus on its core prime shopping center business in Europe.

In response, Unibail’s chairman, Colin Dyer, defended the rights issue, emphasizing that it is part of the company’s RESET plan. This plan aims to improve the firm’s balance sheet by selling assets, raising equity, and cutting capital expenditure. Dyer believes that the implemented plan will provide long-term benefits to shareholders by ensuring operational and financial flexibility. However, independent analyst Amal Aboulkhouatem believes that Niel and Bressler might be able to gather enough support to oppose the rights issue due to their reputations and networks.

Unibail-Rodamco-Westfield currently operates 89 shopping centers primarily in the United States and Europe, including well-known locations such as Forum des Halles in Paris, La Part-Dieu in Lyon, and the Westfield malls in London. The company has been facing difficulties since the acquisition of the Westfield business, and the Covid-19 pandemic has further negatively impacted its stock. As of July 30, the company’s portfolio was valued at €60.4 billion.

Useful links:
Unibail-Rodamco-Westfield official website
Stock overview of Unibail-Rodamco-Westfield on Reuters