Second retail giant buys into Liberty

In a statement the company said that it had bought 10.7m shares in Liberty in June and July at an average price of 835p, a total of £91m.

News of the stakebuilding comes after Liberty revealed on Friday that US shopping centre REIT Simon Property Group, the largest public US property company, had built up a 3.4% stake in the company.

Takeover

The news sent Liberty’s shares up 8% to 945p, with analysts suggesting that Simon’s interest could be a precursor to a takeover bid, an idea that will be further fuelled by news of Westfield’s stake.

On Friday JP Morgan property analyst Harm Meijer said: ‘We believe one possible way of looking at this is that Simon Property’s stake is not a short-term trading transaction and may eventually result in a takeover bid.’

Seat at the table

Merrill Lynch equities director Sarah Cooper said: ‘Both groups have now clearly pulled up a seat at the table. They could either be working together & looking to divide up the assets, or this move by Westfield could be a defensive move to try & keep new entrants out of this market.

‘The key question now is who can afford it. Simon has $782m (£425m) cash & anywhere from $450-$500m (£244-£272m) of free cash flow per year. Additionally, the company issued unsecured debt in May at very affordable rates.’