Does anyone else think there is something wrong with Westfield’s strategy of signing up every investment bank in town to stop a potential rival proposition to its $25 billion merger proposal? This is how we’ve covered the issue in our recent sealed sections.

Is there an adviser not working for Westfield?

We just loved this conclusion to the Dow Jones wire story on the Westfield merger:

“Deutsche Bank, UBS and Grange First Provident are joint lead advisers on the transaction. Other advisers include ABN AMRO, Merrill Lynch, JP Morgan, Carnegie Wylie, Investec Wentworth, Citigroup, Goldman Sachs JBWere, Credit Suisse First Boston and Morgan Stanley.”

Has anyone ever heard of deal in which nine of the world’s 10 biggest investment banks all have a gig, along with two better known boutique corporate advisory outfits? Is Frank Lowy trying to take all the talent out of play, such that if someone wanted to run a spoiling campaign there would be no credible big name to run with?

Hopefully they’ve all been assigned to the various different interested parties because when dealing with three different boards and shareholders you have a lot of negotiating to do. With so many advisers involved it is truly remarkable that news of the merger did not leak before the official announcement.

But where is Macquarie Bank?

What’s wrong, stop the money machine, Macquarie Bank’s name is missing from the cast of thousands advising the Lowy family-dominated Westfield Group of trusts in their grand $25 billion related-party transaction. The advising team included almost everyone under the sun, but no “Millionaires’ Factory.”

Oh dear, questions will be asked. But with a plethora of trusts and other structured investment of their own, perhaps the term ‘conflict of interest’ registered somewhere and prevented the Macquarie boys from bidding heavily for the business, despite Chinese walls and all?

This is most unusual for the biggest player in the Australian market to be missing from the biggest deal of the year. Then again, maybe it reflects the fact that Macquarie Bank has recently become a substantial shareholder in both Westfield Trust (110m units or 5 per cent) and Westfield America Trust (183.86m or 5.01 per cent).

Both moves were fortuitous as the Westfield Trust substantial notice was lodged on January 15 this year and the Westfield America trust notice on February 24.

We’re not for a moment suggesting Macquarie had some sort of inside run on this deal but it is ironic that convicted insider trader and former Macquarie Bank executive director Simon Hannes used to advise Westfield on some of its big deals.

Whilst the media is talking about the Lowy abandonment of external management putting pressure on the Lend Lease/GPT structure, there is an even bigger conflict of interest still out there and that involves Macquarie Bank’s tollroad shoot.

If the world’s biggest retail property group is internalising management, shouldn’t the world’s biggest tollroad company, Macquarie Infrastructure Group, do likewise?

The trick for the Millionaire Factory will be persuading MIG to pay for the internalisation, which is what Frank Lowy has done with his Westfield merger. However, Macquarie Bank can’t exactly merge with Macquarie Bank, which has ripped more than $500 million in fees out of MIG since it was floated in the late 1990s.

Westfield, tax and investment bankers

John Durie had an interesting line in his Chanticleer column (Thursday, April 28) about the $25 billion Westfield mega-merger, claiming that the decision to “hire every bank in town” was “presumably to stifle debate”.

Dear oh dear, should a Fairfax journalist be saying that about the Fairfax CEO Fred Hilmer and chairman Dean Wills, given that both sit on the Westfield Holdings board and are long-time personal friends of Frank Lowy?

It is absolutely unprecedented for 9 of the world’s ten biggest investment banks to work on the same deal. Can anyone help in providing a rundown on the different tasks they’ve all been assigned?

Westfield’s anti-competitive approach to investment bankers

A senior fund manager writes:

If you look at one of the last big deals that Frank Lowy’s Westfield group attempted which involved, amongst other things, a takeover of a Rodamco property fund, there were at least 8 advisors engaged. You can probably find the detail if you look up the history of their public announcements.

This has been a tactic of Westfield for a very long time. What it does is tie up all the best advisors, who are extremely good at raid defence.

CRIKEY: Isn’t this anti-competitive? Frank Lowy believes that money can get you anything in life and clearly he’s happy to spend millions just keeping smart players out of the game.

Westfield’s response

We emailed Westpac requesting a breakdown of what the various different advisers are working on with the big merger, presuming the various different independent directors have needed separate advice.

The reply from Westfield’s Corporate Affairs manager, Matthew Abbott, was brief: “We don’t usually discuss the details of our relationships with the various consultants advising the company.”

Peter Fray

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