Woolworths Limited (WOW) announced a proposal to create Shopping Centres Australasia Property Group, a newly established Real Estate Investment Trust owning a portfolio of quality Australian and New Zealand shopping centres. SCA Property Group will be created via an in-specie distribution to Woolworths shareholders (the Distribution) and related offer to investors. The financial impact is not expected to be material due to the relatively small size of SCA Property Group when compared to Woolworths’ total business. WOW will transfer its current ownership of 69 neighbourhood, sub-regional and freestanding shopping centres to SCA Group. These centres have been independently valued by Cushman & Wakefield, Colliers International New Zealand Limited and Savills Australia in the aggregate at $1,406 million. All but one of the properties have been developed or redeveloped by Woolworths and a Woolworths Group business is the anchor tenant for each property.
Woolworths’ CEO Grant O’Brien said the creation of SCA Property Group signaled further progress against Woolworths’ strategic priorities: “The creation of SCA Property Group is in line with our strategy to act on the Company’s portfolio to maximise shareholder value. “Woolworths has determined that creating SCA Property Group is the best option to reduce the quantum of property held on the Woolworths balance sheet, make better use of Woolworths’ capital, and release value to shareholders. We are focused on growing earnings from our core retail business. Reducing the capital invested in property will allow Woolworths to focus on other growth options,” Mr O’Brien said.
Woolworths Shareholders will receive one stapled unit in SCA Property Group (Stapled Units) for every five Woolworths Shares that they hold on 30 November 2012. In addition to the Distribution, SCA Property Group is undertaking a public offer of 337.3 million Stapled Units to raise between $425 million and $506 million (the Offer) which will be used to partially fund the acquisition of the portfolio.