Klepierre remains interested in Britain, despite failure of Hammerson deal

By Manon Jacob

(Reuters) - French property group Klepierre (LOIM.PA) said on Thursday it was still interested in acquiring assets in Britain after its failed attempt to take over rival Hammerson (HMSO.L), despite a difficult commercial environment there.

Klepierre abandoned its 5 billion pound bid for Hammerson two weeks ago, accusing the British property company of failing to provide "meaningful engagement" over a potential deal.

"We made an indicative proposal to acquire Hammerson a few weeks ago, so we cannot say we are not interested in the UK market," Jean-Michel Gault, deputy CEO of Klepierre, told Reuters in a telephone interview.

Gault said the group still viewed Britain as an attractive and dynamic market, where it would want to develop some assets.

But in a difficult commercial real estate context, British retailers have been suffering as inflation-hit consumers cut back on spending, making many investors wary of the sector.

"We are not overly concerned about a potential negative effect of Brexit since, at Klepierre, we always look for long-term investments. That's why we have such a geographically diversified portfolio, (...) when one market doesn’t have a good dynamic, another generally picks up," Gault said.

The company released first-quarter results on Thursday, with sales growth of 3.4 percent for the whole group compared to the previous year, driven by the performance of Iberia (+6.4 percent), and France-Belgium (+3.1 percent), offsetting the Italian slowdown.

The company reiterated its outlook for 2018.

Klepierre approached Hammerson after the British company had agreed an all-share offer to buy smaller rival Intu Properties (INTUP.L). Hammerson's proposed 3.4 billion pound takeover of Intu was later scrapped.

Klepierre had wanted to buy Hammerson without Intu Properties but finally abandoned its final 635 pence-a-share bid after Hammerson repeatedly stated that Klepierre's offer undervalued it.

The group’s shares went down 9 percent after it approached Hammerson and back up more than 4 percent when it dropped the deal.

According to Jefferies analysts, Klepierre might re-bid for the British peer in the coming months, but this time with a lower offer after Hammerson withdrew its bid on Intu.

(Reporting by Manon Jacob in Gdynia; Editing by Adrian Croft)