Deal would have created the UK’s biggest property company with an international portfolio worth around £21bn
Shopping centre owner Hammerson has ditched its £3.4bn takeover of rival Intu as the outlook for the UK’s retail sector becomes increasingly bleak.
The Birmingham Bullring owner announced an all-share deal for Intu – which owns the Trafford Centre in Manchester – in December, but said on Wednesday that the proposed acquisition was no longer in the best interests of shareholders.
Hammerson’s shares were up almost 3 per cent in morning trading, while Intu’s slipped 4 per cent.
- Read more
Hammerson share price hammered after Klepierre drops takeover bid
Hammerson said its own business had been resilient but “the equity market's perception of the broader UK retail property market has deteriorated since the start of the year”.
The company said this meant that its own share price was too low.
“This perception has been intensified by market concerns over the extended period of time that it would take to complete the transaction and realise longer-term returns from the Intu Acquisition,” Hammerson added in a statement.
A string of UK retailers have announced store closures and job losses since the turn of the year, while a number have fallen into administration as pressures on the sector have reached a tipping point.
- Shopping centre giant Hammerson rejects £5.04bn Klepierre takeover bid
- Shopping centre giant Hammerson awaits clarity over rival bid
- Shopping centre giant Hammerson to buy Lakeside owner in £3.4bn deal
- Hammerson's pre-tax profits more than double as shoppers return
- Hammerson raises cash for luxury spending spree
Hammerson chairman David Tyler said: “In recent weeks, investors have told us they share our view of the exceptional quality of our portfolio and that they have great confidence in our management team.
“The board has complete conviction in Hammerson's prospects as a standalone business as we pursue our plans for future growth.”
The proposed takeover would have created the UK’s biggest property company with an international portfolio worth around £21bn.
Intu described Hammerson’s explanations for backing out of the takeover as “unsatisfactory”.
In a statement, the company said it had been pursuing the transaction in good faith since December and had issued a trading statement yesterday that “underlined the key strengths of Intu’s business”.
Business news: in pictures
Business news: in pictures
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July. The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
Phillip Rasmussen, finance chief of technology company IQE, was killed in an accident while on holiday over the weekend. The company confirmed the 47 year old man had died while cycling in Menorca. A 25-year-old American man was arrested on suspicion of drink driving, after failing a roadside breath test.
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
The takeover target added: “The board of Intu is entirely confident of Intu's commercial future and prospects. The trading update issued yesterday underlined the key strengths of Intu's business.”
The Bullring owner knocked back the revised cash-and-shares bid of 635p – comprising 50 per cent cash and 50 per cent in new Klepierre shares – but said the board was willing to discuss an offer that met its valuation.