Yahoo Finance Top Hammerson shareholder voices opposition to Intu deal
British shopping centre owner Hammerson's proposed takeover of rival Intu hit a stumbling block this evening, after a top three shareholder said it would vote against the deal at an upcoming meeting.
Dutch pension fund APG wrote to the chief executive and chairman of Hammerson saying it had "substantial concerns" over the deal, citing the current retail environment and the increased financial leverage of Hammerson after the proposed takeover.
"Furthermore we believe the proposed acquisition will significantly dilute Hammerson's high quality portfolio," the pension fund said.
APG holds a 7.22pc stake in Hammerson, making it the company's third largest shareholder.
The £3.4bn takeover would give Hammerson control of most of the UK's prime shopping centres, which chief executive David Atkins has said is the best long-term decision for the company.
However, many are sceptical about how attractive a proposition increasing Hammerson's exposure to the UK market is, given the current malaise on the high street.
Stagnant wages and rises in the cost of living have squeezed consumers, prompting a number of high profile retail casualties including Toys R Us and Maplin, and leading to concerns over falling footfall and fewer retail tenants.
News of the shareholder opposition came just hours after French shopping centre company Klépierre walked away from its own £5bn proposed takeover of Hammerson.
The move was due to a "lack of meaningful negotiation" with the company's board, Klépierre said.
David Brockton, analyst at Liberum, said: “Klépierre’s decision to walk away from a bid could still leave Hammerson’s management and shareholders in an unfortunate short-term position.
“The market has clearly taken a negative view of Hammerson’s proposed acquisition of Intu.”
Earlier this week, Hammerson rejected a second approach from Klépierre at 635p per share, valuing it at around £5.04bn, having rebuffed a first offer at 615p last month.
Klépierre had until 5pm on Monday to formalise the offer, but confirmed on Friday morning that it does not intend to do so.
David Tyler, Hammerson’s chairman, had called Klépierre’s initial offer “wholly inadequate” and “entirely opportunistic”, although indicated earlier this week that Hammerson’s board might be open to discussions if Klépierre was to offer an amount which “properly reflects the value of the company”.
Analysts had suggested that Hammerson’s shareholders would only sign off on a deal with the French group if the price were nearer 700p.
Mr Tyler said on Friday that Hammerson had "engaged intensively" with its shareholders and would continue to do so.
"The board is confident in the intrinsic value of Hammerson and its prospects," he added.
