URW to ignore ISS recommendations and calls from minority shareholders for “prudence”
URW will push through unnecessary and value destructive rights issue at the worst possible time if approved at General Meeting
LUXEMBOURG, Nov. 02, 2020 (GLOBE NEWSWIRE) -- The REFOCUS consortium of leading European investors, which holds a combined five per cent stake in Unibail-Rodamco-Westfield SE (“URW”), has found no compelling evidence in the company’s Q3 2020 financial results that justifies management’s “urgent need” for a €3.5 billion rights issue and urges all investors to vote AGAINST it, and FOR enhanced independent governance at a Supervisory Board level in order to provide maximum protection for all shareholders.
Commenting on URW’s Q3 financial results, Léon Bressler and Xavier Niel, said:
“URW’s financial results reconfirm our key position, that URW does not need a value destructive €3.5bn capital raise to meet its financial obligations up to 2023 given its substantial liquidity and relatively low cost of debt. In their own words, URW has “ample headroom”1.
“The results also reinforce our strategic view of the underlying strength of URW’s European assets versus the weakness of the US portfolio. It is time for URW to REFOCUS on Europe in order to generate a superior performance over the long-term, to the benefit of all stakeholders.
“We are alarmed that URW still expects to execute its capital raise by year end 20202, indicating for all intents and purposes that it plans to ignore ISS recommendations to act with 'prudence' and will not allow the re-examination of its merits by an expanded supervisory board. URW will, if authorised to do so by shareholders, execute a rights issue with no defined price at the worst possible time without delay after the EGM.
“Based on this compelling evidence, the REFOCUS consortium has no choice but to vote AGAINST the value destructive €3.5bn rights issue and FOR enhanced independent governance at a Supervisory Board level and urges all shareholders to do the same.”
Shareholders can find out how to vote in line with the REFOCUS consortium’s recommendations on our website - https://refocusnotreset.com/faqs
In its 28th October 2020 report, ISS concluded:
- “The central issue in this proxy contest is the substantial capital raising, which triggered public opposition from the dissidents. The rights issue, which sent the shares 20 percent down over the two days following its unexpected announcement, comes at a steep price to shareholders in terms of diluting future potential upside once the current crisis passes. Shareholders are rightly questioning the proposed cure at a time when the stock is trading at its lowest level for the last 20 years. We note that the rights issue can be executed immediately after the EGM approval is obtained.”
- “Overall, our analysis, which is based on publicly available information, does not lead to the conclusion that there is an urgent need for the proposed capital raising. The dissidents have also made a compelling case that there are sufficient reasons to question the company's strategy and the board's role in overseeing management, which has resulted in significant TSR underperformance since the Westfield deal was announced.”
- “Our recommendation of qualified support for the capital raise – in combination with our recommended support for the addition of dissident nominees to the board – seeks to encourage the board to act with prudence and consider the results of the shareholder vote (and the views of the dissident nominees, if elected) before rushing to execute a capital raise immediately after this EGM.”
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This document has been issued by Flagship Retail Investment S.à r.l. (“Flagship Retail Investment”), an investment vehicle of Aermont Capital Real Estate Fund IV SCSp managed by Aermont Capital Management S.à r.l., and by Rock Investment, a wholly-owned subsidiary of NJJ Holding, the personal investment vehicle of Xavier Niel (“Rock Investment” and, together with Flagship Retail Investment, the “Consortium”).
The purpose of this document is to provide information about the Consortium’s views on Unibail-Rodamco-Westfield (“URW”), its opposition to the €3.5 billion rights issue at the 10 November 2020 general meeting, the possible alternate strategy that could be implemented to deliver long-term shareholder value and its proposal to strengthen URW’s Supervisory Board through the appointment of new members.
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1 Source – URW Q3 2020 earnings Press Release – Page 79. QUOTE – “these [credit] ratios show ample headroom vis-à-vis the unsecured credit facility covenants”
2 Source – URW 9M 2020 RESULTS Presentation – Slide 24