Transcripts of the big Westfield clashes of 2014

FRANK LOWY: Good morning, ladies and gentlemen. It gives me great pleasure to welcome you today to the annual general meeting of Westfield Holding Limited, which will be followed by meetings to consider the restructure proposal with Westfield Retail Trust. It is my pleasure to welcome the members of the Westfield Group Board attending today, including our directors resident overseas ‑ John McFarlane and Lord Peter Goldsmith from London, Roy Furman from New York and Peter Lowy from Los Angeles.

Gentlemen, we are delighted that you are able to join us here in Sydney today. Before I open the meeting, I'd like to introduce Simon Tuxen, the Company Secretary, to take you through some procedural matters which will apply to all the meetings being held today. Simon.

SIMON TUXEN: Thanks, Chairman. Ladies and gentlemen, we'll actually be holding three separate meetings today. First, there's the regular annual general meeting of Westfield Holdings and that's going to be followed by the scheme meeting for Westfield Holdings, at which we'll consider the de‑merger and merger proposal. Finally, we'll be holding general meetings of each of Westfield Holdings, Westfield America Trust and Westfield Trust, and those meetings will be held concurrently. Together those three entities make up the Westfield Group. Each meeting is going to be held right after the other so we encourage you to stay until the end of the third meeting.

FRANK LOWY: Thank you, Simon. Ladies and gentlemen, I'd like to start by opening each of the five resolutions in the Notice of Meeting and opening the polls in respect of all five motions to be considered at the annual general meeting of members of Westfield Holdings Limited.

Ladies and gentlemen, as has already been mentioned, we have three meetings to conduct today. The first is our usual annual general meeting. The second and third meetings relate to the proposal to restructure Westfield Group. There will also be a meeting later in the day for investors in Westfield Retail Trust to consider the restructure proposal. I will now give you a brief overview of performance of the group, as I would do at a regular AGM, and take questions relating to that. In the following meeting, I will speak in more detail and answer questions about the restructure.

I'm pleased to report that Westfield Group is in a very strong position. In February, we released our annual results for 2013, which showed a net profit of $1.6 billion. Our funds from operation, the primary measure of the group's earnings from operations, were $1.44 billion, representing 66.5 cents per security, up 2.3 on the prior year and in line with our forecast. Our most recent retail sales have shown very positive results in all markets in which we operate.

The meeting is now open for questions and general discussion. Ladies and gentlemen, please.

ATTENDANT: Chairman, I would like to introduce Stephen Mayne from the Australian Shareholders' Association.

STEPHEN MAYNE: Morning, chair. Just one quick question on general business. I'd like to hear from Mr Ezzy as well, the auditor, on this one. Can you explain the history and why we don't value the operating platform on our balance sheet? My recollection was that many years ago, ASIC gave us relief and we were able to write it down to zero. Can someone explain why we continue to have that policy because, clearly, it's a very valuable asset that we have? Yet when it comes to our signed audit of accounts, we tell everyone that it's worth zero.

FRANK LOWY: Well, everybody who knows a little bit about it would know it's not worth zero. There was some debate the last few months of what is it worth? And there's some quite different people value it differently. I'll give Peter the floor to give you a little bit more precise information.

PETER LOWY: Thanks, Dad. We wrote it off, I think it must be going back now at least 15, 20 years when we wrote it off in Westfield Holdings. The issue at the time was that the accounting rules changed on how you valued the platform and that you would have to amortise it over the life of the management agreements that we had. Maybe the auditor wants to get up and tell you what the rules are exactly now. But while it has major value and has some 20% of the earnings of the company, it hasn't been on the balance sheet for a very long time because it's an intangible asset rather than a hard asset.

FRANK LOWY: Thank you.

GRAHAM EZZY: Good morning, everyone. My name is Graham Ezzy from Ernst & Young. Stephen, if I can help you with that. Many years ago, more than a decade ago, Australian accounting standards allowed those sorts of assets to be valued by the directors and included on the balance sheet. When this country and when the other countries went to international accounting standards, those sorts of assets, primarily internally generated assets, are no longer allowed to be valued by directors and included in the balance sheet. Only purchased assets are now allowed to be included.

So I won't bore you with all the standards, but it's really the change in the accounting regime that has brought that change about.

FRANK LOWY: Thank you very much. Next question, please. Well then, I think we'll move on. As there are no further questions, I now move to item number 2 on the Notice of Meeting, which is an advisory board by members of the Group - of the Group's 2013 remuneration report. As the members are aware, the directors' report includes the remuneration report which we are putting to this meeting. The report is set out on pages 8 to 33 of the annual report. It sets out the Group's remuneration policies and the remuneration arrangements in place for directors, and certain senior executives' remuneration arrangements, are required to be disclosed by law. I now move that the company's remuneration report for the financial year 31 December 2013 be approved. The meeting is now open for discussion and questions on the remuneration report. Ladies and gentlemen, over to you.

ATTENDANT: Mr Chairman, may I like to reintroduce Stephen Mayne.

STEPHEN MAYNE: Mr Johnson, or through you, Chair, sorry, I presume it is Macquarie Bank or Macquarie Group which is the number 1?

FRANK LOWY: I'm sorry, what is the question? Can you address it to me?

STEPHEN MAYNE: Sorry, Chair. Just clarifying - I know Mr Johnson was one of the co-founders of Macquarie Group and was just clarifying whether it is in fact it is Macquarie Group that is the highest paying...

FRANK LOWY: What has got to do with the price of fish...

(LAUGHTER)

FRANK LOWY: ...of Macquarie Group?

STEPHEN MAYNE: Because the chair of the remuneration committee said that Westfield wasn't the highest paying company, but there was another company out there. And I was just seeking to clarify if Mr Johnson is - is suggesting that's the Macquarie Group.

FRANK LOWY: I think Mr Johnson answered that question. You ask yours, please.

STEPHEN MAYNE: Alright. Look, voting exclusions will be an important issue today throughout the day. It might be one for Simon. Could you explain how deep the voting exclusions have run on this resolution, on the remuneration report? So, the law says, obviously, that you're not allowed to vote your stock. But could Simon just clarify how you've interpreted the voting exclusions on this resolution as to how far down the staff, associates of directors? So where is the line drawn on who...

FRANK LOWY: The line - the line is drawn what the regulation states.

STEPHEN MAYNE: Yes, but I...

FRANK LOWY: Simple as that.

STEPHEN MAYNE: Yes, but I just...

FRANK LOWY: Next question, please.

STEPHEN MAYNE: ...no, no, no, I haven't had an answer to the first question, please. If you can't answer, Chair, maybe Simon can. But could someone explain where the line is drawn, because there always has to be a line drawn. And sometimes these can be open to interpretation and debate. Because I'm interested to find out - maybe Computershare should say, because they've actually handled the exclusions. But where have you drawn the line on exclusions on who can and can't vote on this resolution?

FRANK LOWY: Mr Mayne, there are rules and regulations and we comply with them. And I don't need to specify them here, because I can give you an undertaking that it does so. So please ask the next question. Can you ask the question or sit down, please?

STEPHEN MAYNE: I noticed in the annual report, I think it was only a top 4 that was disclosed this year in terms of the pay...

FRANK LOWY: Could you address the question to me, please.

STEPHEN MAYNE: With the disclosure of remuneration, I think it was only the top 4 that were disclosed in the annual report.

FRANK LOWY: What is the question?

STEPHEN MAYNE: Oh, it is the top 5.

FRANK LOWY: Well, why don't you go in another room, caucus there and come back.

STEPHEN MAYNE: OK, sorry, sorry, I'll move on. Actually, I will ask one more question, now that you've asked for it.

FRANK LOWY: Yes, please. Can you address me...

STEPHEN MAYNE: Mr Johnson mentioned that we're in a competitive market and we need to attract and retain talent and compete with other companies. But I think it's pretty clear that you and Peter and Steven are not going to go and work for GPT.

FRANK LOWY: We are doing what? Peter, me and Steven?

STEPHEN MAYNE: You're not going to go and work for the competitor because you're the founders. So I think it's the old question about the fact that the Lowys have been paid over $300 million in salaries over the last 20 years or so and it is...

FRANK LOWY: Do you know how much money we made throughout this last period of time? Since 10 years, we have delivered $20 billion to shareholders.

STEPHEN MAYNE: Yes. I think it's - I've asked you before and I'll ask you again. Why won't you do what James Packer does and survive on the dividends rather than having to take over-the-odds salaries as well?

FRANK LOWY: Well, I must contest with you over-the-odds business. And I'm not James Packer. And you have been here for the last 10 or 15 years. You raise the same question each time and you've got the same answer. That we act properly. We run the business very, very well. And we do what is within the regulations and all the accepted norms of corporate governance. Any other questions? Well, there seems to be no other question. I'd like to put up the proxy for the approval of the remuneration, which states that - what does it state? 94.2% of the shareholders approve. I'd like to give you the opportunity to vote for or against that motion, please. All those in favour say aye - oh, I'm sorry. I'm behind times. What do they have to do? You have to press some buttons, please.

(LAUGHTER)

FRANK LOWY: The results are coming. Anyway, the motion is carried. Or I'm not allowed to say that now? Is it a poll? The poll is closed. And?

SIMON TUXEN: The results should have been (inaudible).

FRANK LOWY: You can see the poll. And what happens now then? Pardon? Go back to the screen. Yes, sir.

(LAUGHTER)

FRANK LOWY: The result appearing behind me are indicative of the final result. It appears that item 2 has been passed with the required majority. Ladies and gentlemen, we now move to the election of directors. We have four directors seeking re-election here today - Brian Schwartz, Steven Lowy, Ilana Atlas and myself. The notes accompanying the Notice of Meeting include background note on each director, so I do not propose to expand much more on this. The constitution of Westfield Holdings Limited requires that one-third of the board retires each year and seeks re-election at the annual general meeting. Any director who has served a three-year term must also stand for re-election.

This year, Mrs Ilana Atlas is the only director who is required to seek re-election, having served a full three-year term. The other directors seeking re-election are Mr Brian Schwartz, Mr Steven Lowy and myself. Each of the candidates standing for re-election today has served on the board with distinction and the motion to re-elect each director has the full support of the board. As the next item of business relates to my re-election as a director, I will hand over the chair to Mr Brian Schwartz.

BRIAN SCHWARTZ: Thank you, Frank. It's my great pleasure to speak to the nomination of Mr Frank Lowy to re-election of the board. As you know, Frank is the Chairman and co-founder of the Westfield Group, having served as its Chief Executive Officer for over 50 years. After that time, Mr Lowy assumed a non-executive role in May 2011. He's the founder and Chairman of the Lowy Institute for International Policy and Chairman of the Football Federation of Australia.

Frank Lowy is a director who retires by rotation in accordance with the company's constitution, but is eligible for re-election and offers himself accordingly. I now move that Mr Frank Lowy be re-elected as a director of the company. Is there any discussion?

ATTENDANT: Mr Chairman, may I like to introduce Mr Stephen Mayne.

STEPHEN MAYNE: Thanks, Mr Acting Chair. Just to follow up, it would be good to hear from the Chairman on this. It's pleasing to see the public statements of commitment where there won't be a sale. But ordinarily, in this sort of situation, where you want to, really, ensure there's market confidence, you actually enter into a contract to that end. So you often see it with private equity firms and you agree you won't sell for the first two years, you go into escrow. Why wouldn't Mr Lowy, and why didn't the directors, insist that that happen in this circumstance given that a lot of shareholders were upset that the family sold all 665 million shares in WRT, which will partly form the new Scentre Group?

BRIAN SCHWARTZ: I think it's fair to say that the board are very comfortable with the public statements that have been made and are happy to trust and rely on the statements that have been made. Any other questions? If not, I remind members that we are conducting a poll on all resolutions and I'd like to disclose the proxy results for this motion. The results appear on the screen behind me.

Please now, using the machines, cast your vote on the motion. Thank you. The poll for resolution 3 on the Notice of Meeting is now closed. The indicative final results will appear on the screen behind me. It appears that the resolution to re-elect the Chairman has been passed with the required majority. Congratulations, Mr Lowy.

And I'll now hand back the chair.

FRANK LOWY: Thank you. I now move to the election of Brian Schwartz. Brian Schwartz was appointed as a non-executive director of Westfield Holdings Limited in 2009 and Deputy Chairman in 2011. In a career spanning of more than 25 years, Mr Schwartz rose to the position of Chairman of Ernst & Young and then CEO of the firm from 2005 to 2009. Mr Schwartz assumed the role of CEO of Investec Bank (Australia) Limited. He's currently Chairman of Insurance Australia Group Limited, a director of Brambles Limited, a Deputy Chairman of Football Federation of Australia.

Mr Schwartz is a fellow of the Australian Institute of Company Directors and the Institute of Chartered Accountants. Mr Schwartz is Chairman of the Audit and Risk Committee and is also a member of the Nomination Committee. Mr Schwartz is the lead independent director of the company. Brian Schwartz is a director who retires by rotation and offers himself for re-election. Brian, before I put the motion, is there anything you'd like to add in relation to your proposed re-election?

BRIAN SCHWARTZ: Thank you, Mr Chairman, and good morning again, ladies and gentlemen. I had some notes. That fact is, you've probably covered most of them in your introduction. As Frank has said, my background is - my long-term career was Ernst & Young and Investec Bank as CEO. And subsequent to that, I've been on the Westfield board since 2009.

In addition to the Deputy Chair of the company and Chairman of the Audit and Risk Committee, I serve on the Noms. Committee and I chaired the Due Diligence Committee for the proposed Scentre transaction. My core skills and my focus are obviously in finance, in accounting and in corporate governance and, hence, the roles that I take. And my exposure beyond the company is relatively global in terms of the other companies that I serve on. I also have a particular interest in diversity and in the role of women in the workforce.

I'm keen to work with my fellow directors and with the executive team to enhance the performance of our company and to deliver shareholder value to you, our shareholders. I have the capacity and I look forward to your support. Thank you.

FRANK LOWY: Thank you, Brian. I now move that Brian Schwartz be re-elected as director of the company. Is there any discussion?

ATTENDANT: Mr Chairman, I would like to reintroduce Mr Stephen Mayne.

FRANK LOWY: Mr Mayne, you have got the floor.

STEPHEN MAYNE: Chair, could you please briefly summarise the history of your relationship with Brian?

FRANK LOWY: Make up your own mind. Next question, please.

STEPHEN MAYNE: Brian, could you please briefly summarise the history of your relationship with Frank?

BRIAN SCHWARTZ: I know where your question is coming from, the relationship goes back a long way, we have worked together on lots of things. Obviously the longest standing relationship is in fact through football, where Frank is the Chairman, I am the Deputy Chairman, and I have been on the Westfield board since 2009 but my relationship goes back a long way before that. I ran Ernst & Young, was never the auditor, was never the audit partner on Westfield, but nonetheless, there is a long relationship with Ernst & Young and me. The fact that we work together, that we work well together, that we agree on many things and that we disagree on some things. This is the point that, really, the question you are really asking, is good for the company, I think. I would like to think that the shareholders think that we work in their interests as a result. So your real question is, am I independent? And the real answer is, I am independent, not just in fact but in practice as well.

STEPHEN MAYNE: That is good to hear. It is unusual to have someone serve as Deputy Chairman on three different entities to the one chairman. That is the unusual element of this. You've got the Football Federation, Scentre, and Westfield Corporation if today's resolutions are passed. That is unprecedented as far as I can recall in the Australian market, for someone to maintain that they are independent and have this role across three different... where you say there was a history, but it is good to hear you say you are independent, and I hope you are able to strongly, you know, stand up for the minority shareholders and independent shareholders when particular transactions are proposed, or there are particular issues that come forward. Shareholders need strong, tough, independent directors, and we certainly hope you are our man.

FRANK LOWY: Thank you. Any other questions? Any other discussion? If there isn't any, if there are no further questions I would like to disclose the proxy results for this motion. The results appear on this screen behind me.

SCHEME MEETING

The scheme meeting of members of Westfield Holdings Limited is the second of three meetings that we are holding today …

The scheme meeting will consider the principal resolution required to be put to securityholders for the restructure and merger proposal…

Ladies and gentlemen, the next two meetings are being held to seek your approval for a proposal to restructure the Westfield Group. There is no doubt that the information in the Securityholder Booklet that was sent to you was complex and lengthy. The rules and regulations apply just to provide you with that information, and I am sure that you do not want me to recite that document in my address. I will try to summarise key points that lay behind the proposals. The rationale for the restructure is clear. Creating value and choice for securityholders. It is the same rationale which has driven every change we have made to the Westfield structure over 50 years. Through this restructure we would create two great companies. As Westfield Group securityholders, you will have a share in both of them. The proposal would create a single company to own and manage Westfield centres in Australia and New Zealand, called the Scentre Group. Westfield's international business would be conducted by a new company called Westfield Corporation. Both our businesses enjoying leading market position and scale and are ready to stand on their own. By separating the Australian and international business, each would operate more efficiently. Each new company would be more nimble and better able to take advantage of opportunities that arise, and the choice for US investors would be much clearer. As you know, ladies and gentlemen, the proposal before you today has the support of the board of Westfield Group and has been judged to be in the best interests of the company by an independent expert, Grant Samuel. Later today, Westfield Trust investors will also meet to consider this proposal. At this stage it is very hard to predict the result. It is clear that there is a minority of WRT investors who for various reasons have said they do not agree with the proposals. That is, of course, their right. They are entitled to their opinion and I respect that. But, it is also clear that the board of WRT and its independent experts KPMG, do not agree with that minority view, and have recommended that the WRT shareholders vote in favour. It is also clear that most WRT investors favour the proposal. The WRT proposal requires 75% of shareholders vote in favour. Because of this 75% hurdle, as I have already said, WRT vote is too close to call. We will have to wait for this afternoon's meeting to know the result. We believe strongly that separating the businesses will create greater value for investors over time. The board of WDC reached a conclusion independently of WRT. But our preference was to share this opportunity with the WRT investors. The WRT meeting this afternoon, if it does not approve the proposal, it will not diminish our determination to proceed with WDC's strategic objective of separating the two businesses. We would pursue the separation but without WRT. However, the existing relationship with WRT will continue. Any new proposal will embody all the positive elements of the current proposal - greater value, greater choice, more efficient companies and a brighter future. We will begin that process immediately, and I expect the revised plan to be presented to securityholders by the first quarter of next year. Whichever way the vote falls, we will be moving forward. We will be touch with you to keep you informed of the next steps. I thank you for your ongoing support and for your confidence in me, the board and management team, Westfield.

I now move to the only resolution before the scheme meeting, which is to consider, and if thought fit, to agree to a scheme of arrangement proposed to be made between Westfield Holdings and the holders of its fully paid ordinary shares. The full text of the scheme resolution appears on the screen behind me. I now move the resolution, is there any discussion?

ATTENDANT: Chairman, I would like to reintroduce Mr Stephen Mayne.

FRANK LOWY: Yes, Mr Mayne?

STEPHEN MAYNE: Chairman, why was it necessary to retain seven different investment banks and pay them a collective $70 million on this internal restructuring?

FRANK LOWY: Do you have any other questions?

STEPHEN MAYNE: No, not yet, I will sit down, you can answer that one.

FRANK LOWY: Why is it necessary? To appoint so many banks for $70 million. I mean, I need to tell you, that if you don't know, which I think you do, but you asked the question for obvious reasons, is that this is a very complex, very detailed, and requires a lot of advice. I think we don't have seven banks, WRT have their own banks and we have ours so we have three banks advising us on that. Is that right? Two? WRT has two?

(INAUDIBLE)

So, there is another issue to deal with, Peter just reminded me, that we have to renegotiate debt for about $22 billion, because they lent the money to one company and it will be a different company. So I can assure you that I'm not in the business of wasting money. And I know it is not cheap, but this is what these banks require to be paid, and I think we get very good advice, we know now what we didn't know before, of course, during the process, and that is the reason why we have these banks. Any other questions? Yes?

ATTENDANT: Chairman, I would like to reintroduce Mr Stephen Mayne.

FRANK LOWY: We know him already, you just said his name.

STEPHEN MAYNE: Chairman, could you provide a brief summary of the proxy solicitation campaign that Westfield has run related to this vote, including how much of the shareholders' funds you have spent on that campaign?

FRANK LOWY: I don't know how much we spent on the campaign. I think we have a firm of proxy solicitation; Peter is looking at me, I think he wants to answer. Go-ahead, Peter! Go ahead, go on, please, answer the question!

PETER LOWY: We did have a proxy solicitation firm, we spent about $50,000.

FRANK LOWY: Thank you. Any other question?

ATTENDANT: Mr Mayne has another question.

STEPHEN MAYNE: Chairman, how many meetings or separate phone conversations did you have with individual investors, attempting to persuade them to vote in favour of this transaction? So, I mean…

FRANK LOWY: You categorise the question wrongly. We have explained the pros and the cons of the proposal, and I have attended probably about maybe 15, 20, 17, I don't know.

STEPHEN MAYNE: If I can bring those couple of points together. When you hire seven banks, and when you hired nine banks in 2003-04, when you did the original consolidation, it has the effect of gagging analysts who would normally be able to contribute to a debate. So, Deutsche and Citi and all those analysts who would normally pump out lots of analysis, independent analysis, on very complex controversial transactions are silenced because they are being paid an average of 10 million each. So we certainly hope that that wasn't part of the motivation for hiring record levels, record numbers of investment banks. And if that was, I think we made a mistake in not hiring Macquarie as well, because they have actually done a bit of damage to this transaction, because they have been quite critical of some of the valuations. Then, you have run a very heavy lobbying campaign, you have made a lot of phone calls, you hired firms, the bankers are out there, you have had quite an army. You have had the full-court press involved in persuading shareholders in WRT. Now I would like to ask what did the independent directors of WRT have to do with his campaign, or was this campaign entirely run by the management team and the Westfield Group team? Or did you defer to the independent directors of WRT and make sure they were comfortable with the level of aggressive campaigning and persuading that has gone on so far, and has just been further cranked up now, when you have said that you will do effectively a demerger without WRT, that will leave WRT as a subscale, stranded, less attractive vehicle, and between now and two o'clock you are hoping that some WRT shareholders will look at that and say, “That is not for us, we will change our vote”. You said the campaign is continuing, and I think frankly it has been a bit heavy and it has been a bit unfair, and I would like you to explain what the WRT directors have been doing, reflecting the interests of the minority shareholders in WRT throughout this process.

(APPLAUSE)

FRANK LOWY: Mr Mayne, you are making a speech, you dream up half of the things that are not correct, and then you come here and present them as facts. In short, WRT have got, how many board members? Five independent board members. We have had the proposal prepared for ourselves, and then we invited WRT to see whether they wanted to join. They have decided to join; the five independent directors have decided to join us in pursuit of this proposal. They did what they had to do, and we did what we thought we had to do. All this coercion and heavyweight, and money spending, is a load of nonsense. I could use other words but it wouldn't be appropriate here. You dream these things up. I mean, you have been coming here to this meeting for the last 10 or 15 years and continually represent the view that is totally out of context and out of the way we do business. So, I tell you, that they have made up their mind, we have made our mind up that this is a good proposal for both of us. We work very closely together, and we were separated when it was necessary to separate. They have had their own banks advising them and we have had our own. The discussions from time to time were robust, but in the end we came to terms. And this is all that I can tell you about it, because I do not know any of the things you are talking about. Any other questions please?

ATTENDANT: Mr Chairman, I would like to introduce Miss Llewellyn Smith.

JOY LLEWELLYN-SMITH: Hello Chairman. I have been coming to many meetings, and I didn't expect to stand to speak today. I've stood because I am concerned that you are not being fully informed. I was one of the people that was rung on a Saturday, asking me about how I was going to vote. And I was very confused, and I asked questions, and the gentleman kept going and referring to his supervisor. So eventually I said, “Whose will are you representing?” He was so confused he ran off. So, in case it is important, I have stood to make it known in the meeting that people were being rung, and they were not being told exactly who was ringing them, but being asked to vote for. So, I hope that is useful information.

FRANK LOWY: Thank you very much. We have engaged proxy solicitation people, that their job is to ring up, to find out whether some people would like more advice, and of course they solicit the proxies. Unfortunately, from time to time, not everybody in that world or in that part of the world is strict about what they say. But I must say this is a very complex resolution, and if somebody has offended you Madam, I fully apologise for that. Yes?

ATTENDANT: Mr Chairman, I would like to introduce Mr Piers Parbury.

FRANK LOWY: I didn't get your surname, could you repeat that please?

PIERS PARBURY: It's Parbury.

FRANK LOWY: Yes, sir.

PIERS PARBURY: Thank you. Further to what the fellow over there was saying about these fees of $70 million, I think by any account that is a huge sum of money, regardless of the size of the organisation. It has been rather brushed aside this morning, as just a fact of life. For all of us who are not as au fait about investment banking and the raising of funds, do they charge a percentage of the money you are trying to raise? That is the only way I can think of, off the cuff, of how it could be such a huge sum. Because if it is charged by the hour, even at a large fee per hour, that is still a huge number of hours. I would be very interested to know how such a large fee, number of fees, was accumulated. Thank you.

FRANK LOWY: Thank you. Well, I think that I need to give a little bit more explanation than what appears to be in the domain. This deal is a $70 billion transaction. And the debt is $22 billion. So I think we ought to separate the two issues, because they are two separate actions. We in the company need the expertise of the banks to advise us. This is done by negotiations. Between the banks and ourselves, each individually. It is not done on a percentage basis of the amount that they raise, and certainly not done on an hourly rate. We are paying for the expertise that we receive. There is a lot of expertise in these banks, and we negotiate quite hardly with them. But we do need them. All organisations need them. They give good service. They give us the guidance that we need to make decisions. They are technically very correct. And they give very strong business advice. Let me ask a question, the $70 billion can you detail it, what it is, please Peter.

PETER LOWY: Just to go through it a little bit, there are 100,000 shareholders in WDC, there is 80,000 in WRT, we are paying, repaying, and then reissuing some $22 billion of debt. When you look at a lot of the fees, a lot of the fees are based on success, on the vote going forward, on the debt being repaid, and then being reissued. So when you keep talking about $70 million of fees, this only happens if the transaction actually happens. A large part of those fees have to do with the debt. There are two completely separate companies which is WRT who have their advisers, and WDC, who have our advisers. As my father just said, this is a $70 billion transaction.

FRANK LOWY: Any other questions, please?

ATTENDANT: Chairman, Mr Goldin has another question.

ALLAN GOLDIN: Hello Mr Chairman. Just on what was just said, I understand that a lot of the money went because of the refinancing of the $22 billion worth of debt between the two companies. Westfield Corporation will be up for about 1.5 billion of that, mainly because of the paying down of the bonds, having to pay them out early. I understand. I know that that isn't going to be shown in the books as 1.5 billion, because hopefully you're going to be getting a lower rate of interest that you'll be paying. I was just wondering whether there is any feeling as to what the average rate of interest you will be paying is, that we have paid these bankers all this money for, as in if the deal goes ahead, because I assume it's going to be something that's going to happen in the next few weeks, if it goes ahead. So I was just wondering if we know what the average rate of interest will be. Thank you.

PETER LOWY: Firstly, it is incredibly complex and will not happen in the next few weeks. We have two major bridging finance facilities outstanding, that will take somewhere between six and 12 months, 18 months to repay them. When you look at the average interest rates, the interest rates for Scentre Group will be around 5%, and for Westfield Corporation around 4%. The one other thing I want to say back to a question before though, about the banks, is that the ability of banks to write independent research about this transaction actually depends on their internal protocols, not whether they do work for us or not. So, some banks, depending on what work they do and where they go, so if you look at Bank of America/Merrill Lynch working on some of this proposal, they have also produced research. So we cannot, in essence, do what you are suggesting, where we buy banks off by hiring them to come do the transaction.

ATTENDANT: Stephen Mayne has another question.

FRANK LOWY: Aren't you tired yet, Mr Mayne? I'm getting a little tired, I must say.

STEPHEN MAYNE: The main game does not start until two o'clock. Could you undertake to, when you disclose the proxies to the ASX, could you undertake to break out the Chairman's proxies. Sometimes companies do that. That is best practice. Our proxies are 2.6 million undirected. So, ideally you would tell us at the meeting, but if you haven't got it or it is not part of the script, can you just undertake that you will make that figure public? Because it will obviously be a tight vote.

FRANK LOWY: A tight vote where? It's at 98% here.

STEPHEN MAYNE: This afternoon will be a tight vote.

FRANK LOWY: Oh this afternoon, the afternoon meeting is not mine.

STEPHEN MAYNE: I am just asking if broadly we could have an overall undertaking that we will disclose the undirected proxies held by the chair at today's meeting extravaganza.

FRANK LOWY: Mr Mayne, I will not give such a guarantee.

STEPHEN MAYNE: Alright.

FRANK LOWY: It is not necessary, it is not required, and we do not have to live by your wishes and dreams of what is right and what is wrong.

STEPHEN MAYNE: I think would be a bit more transparent, but that is fine.

FRANK LOWY: Ok, so you don't think so. Bad luck.

STEPHEN MAYNE: Can you summarise the total unrecoverable costs of this transaction? Because it seems that we are blowing up more than 2% of NTA across the two groups; it is an extremely expensive transaction. I think there is a good argument for voting against just on the basis of avoiding $450 million of transaction costs. Can we have…I know it is not totally clear because we do not know the interest rate on all the debt, so that you can't give a precise figure… but there are all sorts of different figures in the documents and all sorts of figures in different reports, what is your summary of how much this transaction will cost the shareholders in unrecoverable costs if the shareholders voted in favour today? Is it really $500 million?

FRANK LOWY: It's a joke, I mean, what you are talking about is a joke. In fairness, you ask a question. I think Peter Allen will probably have the answer. But, what can I tell you? Peter, can we tell him what you know, what is proper public information?

PETER ALLEN: Yes, so Stephen, in terms of the total cost in which you term as unrecovered as going out, where in effect shareholders are paying from both the Westfield Retail Trust and Westfield Group as far as the Securityholder Booklets are concerned, there is around $200 million of cost in terms of the breakage of the bonds that are being issued by Westfield Group, which is required to be paid in terms of the make whole provisions of those bonds to facilitate the demerger of Westfield Group.

Then, as you mentioned, or, as was mentioned previously, there was mark to market on that which we will get a benefit of reduced interest rates over the time of those bonds. On top of that, you have the banking fees, which are also set out in the Securityholder Booklets, which will be going out of the business. Together with costs as you mentioned, or the previous shareholder mentioned, in terms of printing, stationery, postage etc. They are the major costs of the transaction.

ATTENDANT: Chairman, Mr Mayne has another question.

STEPHEN MAYNE: Just to start with a comment, I think that is a little bit oppressive to the shareholders who are still to make up their mind. That you've said on behalf of the board of this company that you are going to make a decision, a specific decision, when the scheme book talks about a range of options. I would have thought the more appropriate course, if the shareholders vote the proposal down this afternoon, would be to consult with those shareholders and ask them what the problem was. Then, recut the deal. You have already sweetened the deal once.

FRANK LOWY: Mr Mayne, Mr Mayne. Please, this is your agenda, our agenda is different from yours. I heard you last night on television. I think it was last night. Your advice to us. I heard you. But we are not going to follow it.

STEPHEN MAYNE: I just think you are making a precipitous decision to announce the course.

FRANK LOWY: I have done this for the last 50 odd years and we haven't done too badly.

STEPHEN MAYNE: But you only own eight percent of the company. You are operating like you own 100 percent.

FRANK LOWY: There is a board here that is responsible for this action and your advice is not taken. So what? Have you been such a success in the last 30 years that we should take your advice? Are you an expert in development? An expert in construction ? You are an expert in criticising and that is what you do a very good job. But we don't have to take your advice. Your characterisation that we are oppressive is wrong.

STEPHEN MAYNE: I am deputy chair of the planning committee at the City of Melbourne. I do know something about…

FRANK LOWY: Congratulations for them that they have you.

STEPHEN MAYNE: I would like to say to the rest of the board that there are numerous directors here. You're not the only director. Nothing can happen at this company unless a majority of hands go in the air from the directors. And the independent directors who are meant to be standing up for the independent shareholders should not be allowing this to be said. Precipitous decisions based on a theoretical possible outcome this afternoon designed to sway some last-minute shareholders to go the other way. It is oppressive and it shouldn't be happening. I would have expected a lot more from luminaries on this board to allow this strong arm tactic to be rolled out like this.

FRANK LOWY: Mr Mayne, I ask you to sit down, please.

STEPHEN MAYNE: Certainly.

FRANK LOWY: I want to give you an explanation. Mr Mayne, your characterisation is absolutely wrong. We had a meeting yesterday afternoon, we had two meetings with the board yesterday and the day before yesterday, one was to approve whatever we are doing here and yesterday we had a meeting of the board this afternoon and we presented various proposals to the board and the board unanimously asked us to pursue the option that I have just outlined. I mean, you are in dreamland. You are in dreamland to suggest that this is run by some oppressive way. That I make the decisions here. These gentlemen, these ladies and gentlemen are sitting here, and what I am saying is exactly the fact. What you are, you are dreaming. You are just a troublemaker for the sake of getting your own publicity. We are responsible board here, doing the right thing, spending as little money as possible and making as much as possible. That is what our job is. You know? I would like to ask you to respect us a little more, than use these outrageous statements. Any other questions please?

ATTENDANT: Chairman, I would like to introduce Mr Gary Feller.

FRANK LOWY: Yes please.

GARY FELLER: Mr Chairman, I have been a member of this, a shareholder, and I have never seen such despicable behaviour all my life. Every time we have meetings, he stands up and interrupts and asks all sorts of irrelevant, stupid questions. You do not represent me and I am sure you do not represent a lot of the shareholders. Alright? Don't interfere, OK? Don't cause trouble. Show some respect to the board. And, to the other shareholders. OK? Thank you.

FRANK LOWY: Thank you very much. Well, ladies and gentlemen, I am going to close this down. Sorry, I can't.

ATTENDANT: I would like to reintroduce Mr Piers Parbury.

PIERS PARBURY: Contrary to what those last comments were, Chairman, as much as you don't like to hear what Mr Mayne has to say, there are many of us who are not as well informed or as well educated as others in the room and his comments are actually very interesting and they certainly should be voiced. We do still live in a democracy and we can still speak freely. I know you take great umbrage, taking it as an insult, his words. There might be many other people who would like to hear it and it is not supposed to be a character assassination of you, personally. There is a big issue here. You have already stated it is involving tens of billions of dollars and costing a large sum of money. So it's not really a question, more just a comment. Many of us are quite interested in hearing other people's comments as well. Thank you.

FRANK LOWY: With respect, we answered all the questions. As much as we have and what we can. But, I don't have to stand here for Mr Mayne or anybody else, to make accusations that are untrue. Our behaviour, me and the board, is proper, business-like. We make decisions in accordance with what is expected of us. And, the debate in our board is robust. And, the discussions amongst executives of what to propose to the board is also robust. The record speaks for itself. What I do object, personally, is by Mr Mayne making up these accusations of our behaviour. There is conduct of ours which is in accordance with all the rules and regulations that we do. And, we consider every proposal before us. With very, very serious business. These executives and board members worked very hard. These accusations that Mr Mayne says, are absolutely and totally incorrect and untrue. I don't have to listen to these kind of offensive discussions. Yes, I have an obligation to answer questions. Whether they have 10 shares or 50 million shares. This is our obligation and we do that, we do that with great pleasure and respect to those people who ask them. But I don't need to accept and allow issues that Mr Mayne or maybe somebody else says that are totally untrue. This character assassination comes from him, not from me. Any other questions please? Alright. Calm down, Frank. Get on with the job. If there is no more discussion, I would like to disclose the proxy results received prior to the meeting. They appear on the screen behind me. Please cast your vote on the resolution using your handheld device.

Right? Sorry?

The poll for the resolution of the Notice of Meeting will now be closed. The combined results of the proxy votes received prior to this meeting and the votes cast at this meeting now appear on the screen behind me. These numbers indicate that the final result pending the returning officer confirmation. However, it appears that the scheme resolution has passed with the required majority. Only 98, 97.84 percent of shareholders are in favour of the resolution. I don't know what happened to the 2.6 percent. The final result of the voting on the resolution will be announced at the ASX later this afternoon. You will also be able to access the announcement via our website. That concludes the business of the scheme meeting of members of Westfield Holdings. However, we have a number of resolutions to consider in the general meeting, which now follows. Please remain seated. I declare the scheme meeting closed and we will now move to the general meeting.

GENERAL MEETINGS

I will now convene general meetings of members of Westfield Holdings Limited, Westfield Trust, Westfield America Trust, together with the three entities that make up the Westfield Group. These three general meetings will run concurrently. Having considered the scheme resolution, the resolution to be dealt with at these meetings, deal with the specific approvals which are required in connection with the implementation of the restructure proposal.

Ladies and gentlemen, I now move to the final item on the Notice of Meeting. This is a special resolution of Westfield Holdings Limited to change the name of the company to Scentre Group Limited. The full text of the resolution appears on the screen behind me. I now move that resolution. Is there any discussion? Yes, there is.

ATTENDANT: Chairman, Mr Mayne has another question.

STEPHEN MAYNE: We've had a peaceful 10 minutes, Mr Chair, so just one small question on this one. You mentioned that the board met yesterday and has resolved to move ahead with a separate demerger, creating two listed vehicles in Australia.

FRANK LOWY: You are incorrect, Mr Mayne. It didn't resolve to move ahead. It resolved for the executives to pursue that proposal.

STEPHEN MAYNE: Right. On this resolution about the use of the Westfield name, do you know at this early stage whether a demerged Australian operation would be allowed to use the Westfield corporate name?

FRANK LOWY: We don't know enough about that separation to answer your question. By the way, that question should have been…it is not part of that resolution now, but anyway, let it be.

This is the last resolution that we are voting on now. If there is no more discussion, I will now disclose the proxy votes received for this resolution. The resolution to change the name of the company to Scentre Group Limited has been passed with the required majority.

Ladies and gentlemen, that concludes the meeting. Thank you for your attendance. It was a little bit testy from time to time. But we are used to a robust discussion, but we will not be listening to accusations that are incorrect. Ladies and gentlemen, on behalf of the board of senior management, I thank you for taking the time to attend and vote at today's meeting. Good afternoon.

(End of session)

Westfield Retail Trust EGM chaired by Dick Warburton

Good afternoon ladies and gentlemen, my apologies for being a little bit late. But they do welcome you to the meeting of members of the Westfield Retail Trust one. And Westfield Retail Trust two. Many this Richard Warburton and I am the independent chairman of RE One Limited and RE Two Limited.

The first item of business is the ratification of the continuing appointment of Mr Andrew Hamas as a director. The remaining four items of business are in relation to the proposal to merge the trust with Westfield group's Australian and New Zealand business. Before we turn to those items, Mr Dominic Panaccio will address the meeting.

DOMENIC PANACCIO: Thank you Chairman. Ladies and gentlemen, as the managing director of Westfield Retail Trust, it also gives the great pleasure to welcome you to our third annual meeting. Westfield Retail Trust was formed in 2010. Our purpose is to provide investors the opportunity to invest in a portfolio of high-quality shopping centres. Through a vehicle with a strong balance sheet. With its own board and corporate management scheme, and with Westfield group as our joint-venture partner. And property manager. The trusts the trust's focus is to provide returns for our security holders. We do this by maximising the operating performance of the portfolio. Continuing to invest in and enhance the quality of our shopping centres, and capital management initiatives. For most of the time, since the trust's creation, the retail environment has been challenging. With low sales growth, and deteriorating leasing metrics. Although, we have seen some improvements in recent months. Yet despite these challenges, the quality of the portfolio and the strength of the underlying cash flows is evident. With the trust delivering on all of its financial forecasts, during that time …

RICHARD WARBURTON: I think that deserves a clap. Some fantastic developments in those of five centres you have seen. Thank you Dominic, a good overview of the operations. And the very good results for what has been a difficult period over the last two or three years. Your results are quite strong. I would like now to open the meeting for any questions for management of the auditor.

ATTENDANT: Chairman, I would like to introduce Mr Stephen Mayne.

STEPHEN MAYNE: Hi, Chair. Just one brief question on general business. Look, well done to the board for keeping the gearing low over the last 12 months. We've learnt the lessons of the GFC, the gearing is still down around the 22% mark. Didn't go overboard with buybacks, haven't gone overboard with distributions. I just wonder if you could explain to the meeting what your thinking was in continuing that low relative gearing in Westfield Trust up until this point.

RICHARD WARBURTON: Well, that was the manner, Stephen, in which it was set up. It was set up to be, if you like, a lowly geared, low risk retail investment. We've been able to make acquisitions, even within the current gearing that we've had, and keep that gearing at the low rate. But it has been a continual pleasure to me to see how we've been able to do that and keep the objectives that we already had at the beginning of 2010 keeping going along the same lines. Question over here.

ATTENDANT: Chairman, could I reintroduce Mr Stephen Mayne.

STEPHEN MAYNE: Thanks, Chair. Just one question for Mr Harmos. Westfield Retail is a unique structure on the ASX, or certainly amongst the top 50 stocks, where the shareholders or the unit holders don't get to appoint the directors. So all we're doing today is approving Westfield's selection of Mr Harmos to be an independent director.

Now, obviously, you might be in a stronger negotiating position with Westfield if your directors had tenure from their shareholders, which they obviously don't get that because we don't have that power. And that's one of the problems with this captive vehicle structure that we're faced with now. I'd just like to hear from Mr Harmos about how that impacts on him, if at all? The fact that he's not really appointed by us but he's actually appointed by Westfield as the responsible entity for this vehicle, and whether that in any way influences his ability to tell Westfield where to go when it needs to happen, or to stand up and strongly advocate for the minority shareholders in WRT.

RICHARD WARBURTON: Well, first‑up, I'm going to answer that anyway by saying that Mr Harmos definitely acts in interests. You know, with the structure which we've got now, which you've now known for three and a half years, it's no surprise ‑ in actual fact, there is not a resolution to be run by the shareholders per se for this decision, but it is a ratification. It's not necessary under the Corporations Act, but we've been doing this now for two and a half years. And if any of you, in the course of this meeting, voted heavily against that director, then we would look to replacing him. That has not been the case. But I can assure you that Mr Harmos has a very independent mind when it comes to some of the directions he gives. I'm not sure that he has to respond to that because I can respond for him.

OK. If there are no other questions, before I put this to the vote I would like to disclose the proxy results for this motion. The proxy results for the resolution 1 appear on the screen behind me. I remind members that we are conducting a poll of all resolutions and I will now put the motion and declare the poll open. Please now cast your vote on resolution 1, using your hand‑held devices. Thank you. This is part of the high‑tech that we were talking about earlier, by the way. That didn't get a laugh, did it? (Laughs)

Have all the security holders voted? Thank you, the voting on resolution 1 has now closed. I've been advised that all the votes have been now counted and the results are now displayed behind me. As you can see from the figures, I declare the resolution passed. Thank you very much for your votes and thank you very much, to Andrew Harmos, for being part of this board.

We now move to resolutions 2 and 5, which relate to the proposal to merge the trusts with Westfield Group's Australia/New Zealand business to create Scentre Group…

There has been a lot written and a lot of focus on the proposed transaction. Concerns have been included that it is dilutive to NTA, it increases gearing, or even that we are contributing a disproportionate level of net assets. This concers, however, ignore the significant earnings stream that we would derive from what is widely acknowledged as the leading property management platform in Australia.

The Independent Board Committee appointed KPMG Corporate Finance as an independent expert on the proposal, who opined, even prior to the $300 million enhancement, that this proposal was in the best interests of security holders. The proposal has also received support from a significant majority of our shareholders, most of whom are professional investors who have spent a lot of time reviewing the proposal. I propose that we open the meeting for questions on each of the proposed resolutions now.

ATTENDANT: I would like to introduce Mr Stephen Mayne.

STEPHEN MAYNE: Hi, Chair. Look, just a couple of questions on the voting process. We've never seen a vote so tight like this. I think it's fair to go through some of the procedural issues. Firstly, can I ask you, how much of the 14. 9 million of discretionary proxy votes are you holding?

RICHARD WARBURTON: We don't disclose those particular specific proxy holder votes at all, Stephen.

STEPHEN MAYNE: Alright. Now, this morning it was disclosed that the turnout was about 7,000 shareholders in total of the 100,000, which is slightly disappointing. You'd be hoping for a higher turnout. Do you know what the turnout is on this vote in the proxies? Is it roughly 7,000 or 8,000 shareholders who have chosen to vote?

RICHARD WARBURTON: Yeah. I'm advised that we don't have that to hand Stephen but we'll get that for you.

STEPHEN MAYNE: Alright. That's great. Have you had a report from computer share about how many votes are on the floor now? And can you share that with the meeting?

RICHARD WARBURTON: No, we don't.

STEPHEN MAYNE: No, because it looked like there was about 47 million on the floor in the last resolution. And I think there needs to be a 90 million increase in the for vote to get it over the line or 45 million against votes switching to get it over the line. So it is still very tight. Um, do you know or have you had a report from computer share on the number of votes they've rejected? So this is quite common, particularly what's called over voting, where a custodian or nominee votes more shares than they've actual lie got when they check the register? So have you had a report from computer share on how many votes they have rejected?

RICHARD WARBURTON: Once again, Stephen, we've been advised by Katherine we don't have that to hand but again we'll get it for you after the meeting.

STEPHEN MAYNE: Alright, and I had an email exchange with Katherine last night which was good on the question of exclusions and I just wanted to check the response with you, Chair. Under the law, a responsible entity can't vote any stock writ has an interest so the RE can't vote, and I understand, as Katherine said last night, there's an employee executive share scheme I think it is which has been excluded. But no-one else has been excluded, so members of the Lowy family or anyone else associated with VRE, with Westfield, could vote, can vote, and are voting. I just wanted to check with you as to the interpret thanks you've used to take what sounds like quite a liberal interpretation in terms of who can vote and that you're not deeming any one individual to be an associate of the responsible entity and, therefore, excluded from voting.

RICHARD WARBURTON: Stephen, our position is we've applied all of the relevant extensions in accordance with the law. The only exclusion for resolution 1 was Andrew Harmos himself, as we mentioned then. The only exclusions for resolutions two to five is Ammadil Pty Ltd, which is an associate of the responsible entities under the relevant section of the Corporations Act. The WRT and WDC directors are fully entitled to vote at this meeting.

STEPHEN MAYNE: Right. Now, in terms of the proxy campaign that we have seen, how many, which was quite intense, I think it's fair to say, with phone calls to retail and lots of meetings with institutions, how much were you, as the independent chairman, aware of and directing the proxy solicitation campaign?

RICHARD WARBURTON: Could you just repeat that? I'm not sure what I'm supposed to be aware of.

STEPHEN MAYNE: In terms of the intensity of the solicitation campaign that was run, how much were you informed on that? How much were you approving that and how much were you aware of that as our independent chairman?

RICHARD WARBURTON: OK, thank you, I've got the question better now. I wouldn't use the word “solicitation”. I'd use the word “getting out” and explaining the matter to the various investors. It's certainly true that we did get out and we spoke to many investors, generally speaking, at their request. We were asked to come and talk and talk to them because this is quite a complex procedure and they wanted to get straight from the horses' mouth what was going on with the procedure. So we don't hold back at all in the fact that we had that. And also we wanted to make sure that we encouraged them to vote. It's a good democracy.

STEPHEN MAYNE: Yeah, OK. Just two more issues. If this proposal is defeated, and it looks like it will be narrowly defeated, what protections do we have as Westfield retail shareholders if the responsible entity does create a similar investment vehicle through a demerger and will you, as our independent Chair, undertake to release the full management agreements and development agreements to the market so that all 85,000 shareholders can under the contractual obligations that our responsible entity has to look after our interests going forward.

RICHARD WARBURTON: Well, the contractual obligations that we have now will continue. Those will continue. I don't know what will occur when Westfield Group actually demergers and how they'll act it. It's something we'll just have to look at when the time comes.

STEPHEN MAYNE: OK, and just a brief comment on that. That vehicle will be highly leveraged, the leverage will have to be in the 45% to 50% mark, which is part of our grievance that they were trying to load debt on to us, on to WRT. So if they demerge a vehicle without the strength of our balance sheet, that vehicle will, by definition, have to be more leveraged unless there are asset sales or capital raisings. I don't think it's in anyone's interests that that happens, and I was going to say, why don't you go back to Westfield and ask them to recut the deal and give us a higher ratio than 51. 4% rather than go through the messy process of competing subscale listed vehicles. So, if it's not in our interest, and you've been hinting that it's not in our interests, will you go in hard and hopefully Stephen and Peter will be receptive to a modest recut of the deal and then to represent a fairer deal that we can all vote in favour of.

RICHARD WARBURTON: We'll recognise, Stephen, that we as a board, the independent board, studied this very closely when we got the first offer from Westfield Group along these lines. We formed this independent board. We negotiated were strongly with Westfield Group and we arrived at a position that we believed was fair and reasonable. To say it was out of court is your words. It's not my words. We found it was fair and reasonable. To verify that, we went through an extremely robust due diligence program to make sure that was the case. The independent expert independently found out that they had the same results as we did, that it was fair and reasonable. So we believed it was something in the best interests of the shareholders going forward and that's what we recommended.

Would you like a word, Stephen?

STEVEN LOWY: I'd like to respond to Mr Mayne in some of the comments that we made. And you made these comments this morning in a WDC meeting but I'll restate it so all of the shareholders of WRT completely understand the situation. The chairman of WDC this morning made a statement that if this deal was not to reach the hurdle, by the WRT shareholders, that WDC would pursue the demerger of its international business from its Australia-New Zealand business without WRT. I want to be clear about that, so everybody understands that. Stephen Mayne heard it this morning and he's re-asking it again. The board of WDC met yesterday, late in the day, and made that decision, and that was conveyed to the investment community this morning. So there is no opportunity for WRT to, as you say, recut the transaction with WDC. So the shareholders will be asked to vote with the full knowledge of the statement made by the chairman of WDC this morning. A second point, which I won't get drawn into because it hasn't been discussed in full, and it will be in time, but Mr Mayne, you make a statement that is fanciful, that you're throwing numbers around that are incorrect in terms of in the eventuality of certain vehicles coming about, that they would have to be 45% plus gearing. You have no idea what you're talking about. And it will be up to the WDC board following this meeting, either way, to move ahead and then inform the investment community as it sees fit and when it sees fit.

ATTENDANT: Mr Chairman, I'd like to introduce Mr Peter Davidson, representing BT.

PETER DAVIDSON: Thank you very much, Chairman. Good afternoon. As you know, BT is in favour of this transaction. Since the proposal was launched the share price is up 11% against an index of nine, which is good, and this trust, the last of the major roots to close its gap (inaudible) 20A is moving in that direction so for that thank you. On behalf of every shareholder, I thank you for the proposal. And like many shareholders here today, I waded through all 348 pages of the scheme booklet. Interesting reading.

RICHARD WARBURTON: So did I, five times.

PETER DAVIDSON: Yeah. There were five options on the table at that stage but what we have learnt today is now there is only one. That is, WDC are proposing to demerge irrespective of the vote that occurs. When I cast my eyes at that board over there, that vote looks very close to me. Very, very close. It looks to me that, you know, it could be decided by votes in the room, as Stephen mentioned just before.

The representative of the small shareholders association today in the Westfield meeting raising concerns about WRT, mentioned the fact that if the – the proposal to spin out centre without merging with WRT occurs, what would happen? Would - WRT would lapse, and I use his word, subscale stranded and the least attractive investment. I would argue that this is a material change to the transaction. Before we were looking at five options. Now we're only looking at one. So what I would do - I'm asking the board, can you consider, in light of this vote, in light of the changes that have occurred from Westfield this morning, that this is materially new information and that the vote be postponed or considered?

Thank you.

RICHARD WARBURTON: Thank you for that. Because certainly the information provided by the chairman of WDC today did put what we consider to be a material fact before the shareholders and I feel that I'd like to caucus with my board members just to see whether that - we should proceed with that recommendation. So if you would grant me about five or 10 minutes, and that's all I ask, I'd like to caucus and then get back to you. Thank you.

If you can, if everything holds together, could you stay here for a few minutes? We won't be too far away. Thank you. Here for a few minutes? We won't be too far away. Thank you.

THE MEETING BREAKS FOR 10 MINUTES

RICHARD WARBURTON: We set to go? OK. Thank you very much for your patience. And allowing us to discuss this rather unusual situation, but a very real situation. As you heard, a security holder has proposed that these meetings should be postponed to enable all security holders the opportunity to consider the statement made by Westfield Group this morning. To the effect that the Westfield Group would pursue the separation of its businesses without WRT and whether that statement would impact their consideration or proposal in the way they have cast their vote if they were aware of that. So it's quite a significant position. I'm just going to hand over to Katherine Grace to talk about some of the procedural matters in relation to this, so Katherine.

KATHERINE GRACE: Thank you, chairman. Ladies and gentlemen, further to what the chairman's just mentioned, under the constitution for Westfield retail trust one and Westfield retail trust two, the chairman does have the power to adjourn the meeting. In the discussions we've just had, the chairman would like to seek some guidance from the security holders on the floor today to assist him in the decision that he might seek to make regarding an adjournment of the meeting given the issues that have been raised regarding potential material new information in relation to the transaction. What we'd like to do on that basis, and please bear with us in relevance to this interruption to proceedings that we would like to seek a non-binding resolution from the security holders on the floor in relation to whether these proceedings would be adjourned.

The resolution, which I'd like to put to the floor on behalf of the chairman that that meeting be adjourned to a later date to be fixed and notified to security holders by supplementary disclosure. The chairman would abstain from voting any proxies that he holds in relation to this resolution.

I repeat, this would be a non-binding resolution to assist the chairman in considering the position that we currently find ourselves in. You can participate in this voting by using the hand held devices that you have on the same voting procedure that you have undertaken the other resolutions. That is, as explained to you by computer share. I think for the purples of being able to gauge this indication from the security holders and be able to assess this in an expeditious fashion, what we would like to do is hold the resolution voting now so that even on the floor has an opportunity to provide their indicative position in relation to this rather than taking questions from individual security holders if that is possible.

RICHARD WARBURTON: As Katherine has said, I actually do have the power to actually call it but I'd rather get a feeling from the floor. Is there a question from over here? Looks as though Stephen's ready to talk again.

STEPHEN MAYNE: Yeah, look, chairman, I don't know if it's if it's my background as being an elected councillor but in these sort of situations you need to ask for speakers for and against such proposal. I mean, this is a very unusual situation so I think you should give the floor an opportunity to speak, you know, one or two minute fors or against, not necessarily questions, so that people can get a sense of the arguments and the sentiment for and against and can make a fully informed vote. And obviously you also need to clarify that you're doing it - a vote from the floor on number of shares. I would have thought the sentiment in the room by a show of hands might have actually been more appropriate to get a sense of everyone else who's heard the debate rather than a few big shareholders, including board and management, who can - and you probably already know this, win the day if it's a...

RICHARD WARBURTON: No, I don't know that.

STEPHEN MAYNE: If it's a vote on number of votes as opposed to number of shareholders.

RICHARD WARBURTON: I don't know that answer, Stephen. I just feel that it's more democratic if we do ask the question and, after all, each shareholder has a share that they should be able to vote and, therefore, I would like to get a vote from the floor at least from the computer share IMLs and find out whether they agree with my suggestion. So thank you for that, Stephen.

STEPHEN MAYNE: Can you take speakers for and against after the indicative vote before you make your decision because - you know, it's a massive change to the goalposts here, and I think this sentiment needs to be teased out. You can't just rush to an indicative vote and then go back and bang. You need to discuss this, and allow people to discuss it.

RICHARD WARBURTON: We're not actually rushing to anything in the sense that we want to give people a longer and better opportunity to look into this particular part that's come up now fairly late in the piece. So, I'm going to ask you to use your IML devices to vote to this resolution that we call for a proposal - a - sorry, just one moment. Alright. Just to please Stephen, and perhaps probably rightly so, I could take two or three questions right now without going for a long period of time. So can I get people to give their thoughts?

ATTENDANT: Chairman, good afternoon. Could I introduce Mr Allan Goldin.

ALLAN GOLDIN: On behalf of ASA, we'll be against this. Having the delay. If there is going to be a delay because we're going to get a proper new offer, yes, we'd be for it. That isn't going to be the case. If it's just because Westfield has once again tried to push the hand of Westfield retail trust, which we believe it has done in some the negotiations, which we will talk about late for we have the opportunity, so we'll be voting against it because all it is a move again just to delay something for no good particular reason. Yes, there was a material change. It happened this morning. But it's just a case of Westfield trying to be the big brother and bullying the little guy again.

RICHARD WARBURTON: Well, Allan this morning it was ASA who expressed concern about this, so I'm surprised at your particular comments there. Question over here on the left.

ATTENDANT: Mr Chairman, I just want to reintroduce Mr Pearce Pradbury.

PIERS PADBURY: Hello, Mr Chairman. I appreciate you want to push on this. I may not be alone in this. I haven't got one of these hand held devices because I voted online two days ago. So if we're going to vote now about what you just proposed, I certainly need to go and grab one and maybe some other people do as well. What I was going to ask before, and it's probably now become obsolete, is on the whole issue. Since voting was closed two days ago, and if people are influenced by today's comments, then it's too late for them to be - to change their vote anyway. So, I was - excuse my ignorance on the procedure of things and, as I say, that may have now become obsolete as a result of the last half an hour, but on the point of the getting a hand held device, I didn't bother to get one because I'd already voted so I didn't get one. If I didn't need one. So if I may get - if I may have an opportunity to go and grab one, some other people might need to do that as well.

RICHARD WARBURTON: Can we do that? Can we get more hand held devices for those who haven't got them? Would you like to raise your hand if you would like one and haven't got it? Devices for those who haven't got them? Would you like to raise your hand if you would like one and haven't got it?

(SHORT BREAK)

KATHERINE GRACE: Ladies and gentlemen, just to advise that anyone that did want to vote, has previously voted and has not registered today with an IML device can quickly register outside and then we'll be able to proceed with the voting on the devices. We'll give you a couple of minutes to facilitate that if you make yourself known to a computer share attendant, they'll be able to assist you. Known to a computer share attendant, they'll be able to assist you.

(SHORT BREAK)

RICHARD WARBURTON: Can I ask you if everybody who wanted a device has now got one? Anybody waiting outside computer share? Look... I would just like to just make a comment on one that Stephen made and Allan made, that this is an attempt by Westfield Group to strong arm WRT. I resent that. I resent it very much so. This is one where we believe that WRT shareholders, one in particular, but also we've had similar comments saying, "Look, we think we need a bit more time to review this." And that's the very reason why I feel that we should perhaps postpone this for a short period of time. But I was going to ask Katherine to give the resolution that we're going to put to the floor.

KATHERINE GRACE: Thank you, chairman. Again, ladies and gentlemen, just to repeat that this would be a non-binding resolution to provide guidance to the chairman in relation to any decision for an adjournment. The resolution, the non-binding resolution, we would like to put to the floor is that the meet being adjourned to a later date to be fixed and notified to the security holders by supplementary disclosure. Could you please - Chairman, would you be happy to open the voting now?

RICHARD WARBURTON: Is that the resolution?

KATHERINE GRACE: Yes, that's the resolution.

RICHARD WARBURTON: Yes. OK, I open the voting so would you please use your devices to vote, thank you.

KATHERINE GRACE: Sorry, again for procedural purposes. One on your button is for, two for against and three for abstain.

RICHARD WARBURTON: Has everybody now finished their voting? We will show these results. Remember, this is a non-binding vote. It's just to give me some guidance because, in actual fact, it is up to me whether we do it but I'd prefer to get the feeling from the shareholders themselves. So I close the vote. And where do we stand now, Katherine?

KATHERINE GRACE: We'll put the results up on the screen.

RICHARD WARBURTON: Do we need to go away and talk again? Well, you can see the guidance is that they agree with my thoughts on this. I hate putting this to you, but I would like another five or 10 minutes, if you wouldn't mind, because this is quite an unusual position, as mentioned earlier. So if you can just be patient for five or 10 minutes we'll be back to you as quickly as we can. Thank you.

KATHERINE GRACE: Thank you very much for your patience. Thank you for your patience. Ladies and gentlemen, to reiterate where we ended up in the non-binding resolution that we put to the floor. As you would have seen from the screens, we had 82% in favour of the motion. Just to give you somewhat clarity around that, that represented 90 security holder votes on the floor “for” and 34 against. Thank you Chairman.

RICHARD WARBURTON: Having regarded the votes cast on the non-binding resolution of the meetings, this meeting should be adjourned. Namely, that of the votes cast were in favour of the resolution. I have decided to exercise the power to adjourn the meetings for a date to be fixed and notify the security holders by supplementary disclosure. I expect the meetings will be held within the next ten to 14 days and appropriate announcements will be made to the AXX concerning the outcome of today's meetings and the day for the adjournment of the meetings to be held. On the basis of that, ladies and gentlemen, I adjourn this meeting to that future date. Thank you very much.

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