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Centro Properties Group, facing a February 15 deadline to refinance A$3.9 billion ($4.45 billion) of debt, will consider offers for all its assets, including 700 US malls.
Centro is also one of the biggest mall owners in New Zealand.
In Auckland it owns the Kelston Shopping Centre and
Meadowlands Shopping Centre on Whitford St in Howick. Centro Retail Trust owns the Barrington Shopping Centre in Christchurch.
The group may also divest stakes in its Australian and US wholesale funds, recapitalise or sell stock, according to a statement yesterday. The company did not comment on the possibility of selling New Zealand malls.
The Melbourne-based company said on December 17 that it might have to sell assets to pay debt, sparking an 86 per cent two-day slump in its shares.
"The trouble is that when you signal you are distressed, you may have to take a haircut when selling assets, particularly the good ones," said Michael McCormick, who helps manage about A$170 million at Leyland Private Asset Management in Sydney.
The company has been approached after the A$4.1 billion plunge in its market value during December made it Asia's worst casualty so far of the global credit squeeze.
Potential buyers might include Westfield Group, Morgan Stanley, Brookfield Asset Management and Stockland, said John Snowden, head of property securities at Centro's largest shareholder, Colonial First State.
Centro, with a market capitalisation of A$933.8 million, didn't provide the names or the number of investors that have made approaches. Calls to Westfield and Stockland in Sydney and Brookfield in Toronto weren't immediately returned. Hugh Fraser, spokesman for Morgan Stanley in Sydney, declined to comment.
Chief executive Andrew Scott said yesterday that the company first received offers in the week of December 17 and that "interest has been shown not only from Australian investors but investors around the world".
"We have said okay guys, in terms of the whole company we are interested in talking to you so come on down with any ideas," Scott said. "In relation to a sale of specific assets or parts of the group, we think the two areas that are appropriate to look at are the two wholesale funds."
Centro's largest US shopping centres are Independent Mall in North Carolina and Cortlandt Towne Centre in New York. Its eight most valuable properties are in Australia, including Centro Galleria in Perth and Centro Bankstown in Sydney, according to the company's latest annual report.
"It has been said that it's almost a once in a lifetime opportunity that assets of this quality, being primarily the Australian assets, come up for sale," said Colonial's Snowden.
"The only way a full acquisition could work is if a much larger, better capitalised group is able to take over the business."
Scott took on debt to help fund US$9 billion ($11.7 billion) of US takeovers in the past two years. Centro said on December 7 that sales at its shopping centres rose 6 per cent in the quarter ended September 30.
"There is definitely a stronger outlook for Centro's Australian assets to be sold closer to book value," said Simon Garing, an analyst at UBS.
"The market is sensing the company is finding a way out of its problems," said Richard Wallace, at Wallace Funds Management in Sydney.
Centro must agree on terms with its lenders Commonwealth Bank of Australia, ANZ Banking Group, National Australia Bank, JPMorgan Chase, Royal Bank of Scotland Group and BNP Paribas by February 15.
- Bloomberg
