Question: I received the huge acceptance and voting package for Westfield Corporation (WFD) and I’m still confused. I will be accepting the offer but I understand that accepting the offer will result in a cash payment (which will depend on the $US exchange rate at the time of takeover) and also an allocation of shares in a small tech start up.
It is the shares in Unibail-Rodamco and where they can be traded that is still confusing me. I think it means that one can elect to choose the option of shares that can only be traded on the European exchanges but the default option can be traded on the ASX just like any dual listed company such BHP etc. Is that correct?
Answer (By Paul Rickard): There are really only three issues you need to consider:
- Do you approve of the takeover of Westfield by Unibail-Rodamco and the terms of the offer?
- Do you approve of the separation of OneMarket?
- If a small shareholder, do you want to keep the shares in OneMarket (1 for every 20 Westfield Shares), or have them sold on the market?
I imagine that the votes for (1) and (2) are already locked in to support the proposal and your vote probably won’t count. With the Lowy’s and Westfield directors unanimously recommending a “yes” vote, the takeover and demerger is going to proceed.
In regards to ( 3), OneMarket looks a little like a technology “plaything”. It had revenues of around $2 million in 2017, and has $190 million of cash to “burn through” which will take it into 2019. I can form absolutely no view as to its prospects of success. I guess if you have a tiny number of shares, you sell into the sale facility, if you want a bit of a punt, you hang on.
Question: For several decades I had always regarded AMP as a plodder with many life assurance advisers who returned minimal financial benefits particularly with life assurance bonuses, which were pitiful. I always considered one day it would blossom and following a number of glowing reports I took the plunge a few months ago. The result – a capital loss of 22%. Should I take my loss, smile and invest elsewhere, or holdout and await a long claw back if ever?
Answer (By Paul Rickard): I don’t own any AMP shares. They were in our Income Model Portfolio but it is bailing out.
My advice – cut.
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