http://www.theaustralian.com.au/business/property/israelis-enter-...

http://www.theaustralian.com.au/business/property/israelis-enter-186bn-centro-shopping-centre-arena/story-e6frg9gx-1225964164771?from=public_rss

A NEW bidder has emerged in the carve-up of Centro's $18.6 billion shopping centre empire.
This, with listed Israeli company Gazit Globe, its part-owned US trust Equity One, US private equity group Apollo and Canada's Brookfield believed to have formed a consortium.

The Australian revealed last month that an informal offer from a Lend Lease-led consortium, including Singapore sovereign wealth fund GIC and two US groups prompted Centro to put about $13bn of Australian and US centres on the sales block.

US groups NRDC Equity Partners and AREA Property Partners were understood to part of the Lend Lease consortium.

Another Australian investor believed to be interested in individual or small batches of centres is Melbourne-based Sam Alter's Pacific Shopping Centres.

Time is running out for potential buyers, with bids closing on December 17.

However, sources close to the sale yesterday said a number of interested parties were still to sign confidentiality agreements that would allow them to enter the virtual data rooms.

The web-based data rooms provide information on the $7.3bn of Australian and $US9.2bn ($9.5bn) of US properties.

Due to the complexity of the Centro structure, sources say the outcome of the sale or recapitalisation may not be known until mid-next year. The structure consists of the head stock Centro Properties Group, listed satellite Centro Retail Group, a $2bn wholesale fund and a $6bn syndicates business which together control 700 Australian and US shopping centres, many in joint ownership structures.

Centro's major Australian banks have sold down most of their debt, at about 50c in the dollar, with hedge funds and US groups taking positions. Some of these groups may look to recapitalise Centro at a later date, which may further drag out any deals around the group.

Sources also said Centro Retail Group, which will act in the best interests of its unitholders, may veto low-ball offers for shopping centres it owns jointly with beleaguered Centro Properties.

A spokesman for Centro yesterday declined to comment on the interested parties.

"We continue to progress the formal market process commenced on November 4," he said.

Brookfield declined to comment, while Macquarie -- believed to be an adviser to the Gazit consortium -- and Pacific Shopping Centres did not return a call.

According to Gazit Globe's website, the Tel Aviv-listed group operates in 20 countries and owns and manages 650 properties worth $US15bn. Gazit has a 52 per cent stake in US-listed real estate investment trust Equity One and a 66 per cent holding in the Toronto-listed Gazit America, described on the website as being focused on entrepreneurial real estate opportunities. Gazit America owns about 16 per cent of Equity One.

On November 4, Centro chief executive Robert Tsenin put the company on the sales block saying parties had approached Centro on its businesses and a combination of its assets in Australia and the US. "They have been very preliminary in nature and that is why we are embarking on a formal process now," Mr Tsenin said at the time.

He denied the group's bankers were forcing it to sell the assets.

Market conditions had improved, and some feasible options had been narrowed down, he said last month. "Let me just stress that, and it's an important point, we are not in a fire-sale mode."

Under the November 4 offering from Centro, groupings of properties are being offered including Centro Galleria shopping centre in Perth, with a group of neighbourhood centres in a $750 million batch.

ts