Shopping centre giant to buy half of DFO

Shopping centre owner CFS Retail has placed its shares in a trading halt ahead of a “significant transaction”, believed to be the purchase of a stake in the struggling DFO retail chain.

The DFO chain, which is owned by Melbourne-based property developer and manager Austexx, hit the headlines in August as it teetered under $1 billion of debt.

But a last minute reprieve from the company’s banking syndicate allowed Austexx to avoid receivership, and gave it time to complete the building of its underperforming South Wharf complex in Melbourne, and pursue a restructure or sale.

According to a report in the Australian Financial Review, CFS Retail will buy a 50% stake in Austexx for about $600 million.

However, it remains to be seen whether the purchase will involve buying a stake of the entire Austexx Group – which owns eight DFO centres down the Eastern Seaboard and three homemaker centres – are just the better-performing DFO outlets.

Austexx’s major shareholders include Rich 200 members David Wieland and David Goldberger, and ACCC chairman Graeme Samuels.

While Samuel’s stake in Austexx had been valued at as much as $50 million – when the group as whole was valued at $1.5 billion – it was reported last month that he is now likely to receive as little as $5 million.

CFS Retail owns stakes in 25 retail properties around Australia, including most notably Australia’s iconic Chadstone complex.

Veteran shopping centre owner John Gandel is one of the largest shareholders in CFS Retail.