Hammerson ditches £3.4bn Intu takeover amid bleak outlook for UK retail

PA

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.

​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.

​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”.

“The board of Intu is entirely confident of Intu’s commercial future and prospects,” the statement added. “The trading update issued yesterday underlined the key strengths of Intu’s business.”

It comes just a week after Hammerson rebuffed a sweetened £5.04bn takeover offer from Klepierre, saying the French firm’s advances failed to reflect the value of the shopping centre giant.

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.