Shopping centre giant, Unibail-Rodamco-Westfield surged on bourses in Australia and Europe on Tuesday as vaccine enthusiasm gave the sector a boost, coupled with shareholders voting against a planned 3.5 billion euro rights issue.
On the ASX, Unibail topped the winner boards after gaining 44% to close at $4.12. The stock has been hit hard as lockdowns were announced to combat COVID-19. It is expected that earnings will fall as much as 40% this year.
In Amsterdam, shares also surged 21%, taking it to the top of the STOXX 600 index after its shareholders voted against the planned rights issue. In a rare rejection, the shareholder vote fell narrowly short of the two-thirds majority required to pass the resolution, with only 62% in favour of the capital increase.
The company will now have to seek new ways to manage its heavy debt after shareholders rejected the plan following pressure from activist investors. The consortium of major holders called the issue “completely unnecessary and highly destructive to shareholders” and argued that the firm should sell off its U.S. assets to focus on Europe. It blamed URW’s 2017 acquisition of Westfield, which is mainly focused on the United States and Britain, for the group’s heavy debt.
Despite both bourses seeing weekly gains of close to 50%, the stock is still down 65% for the last 12 months. Chief Executive Christophe Cuvillier advised that the group would need to study “all possible alternatives” to strengthen its financial structure, adding that a possible coronavirus vaccine did not change the need to shore up the balance sheet.