STOCKS NEWS EUROPE-UK mall owner Intu tumbles on rights issue

Shares in Intu Properties (Other OTC: CCRGF - news) fall as much as 4.5 percent to become one of the biggest losers on the FTSE 250 mid-cap index after the British mall owner launches a 500 million pound ($831.38 million) rights issue to help fund a 867.8 million pound deal with Australia's Westfield.

Intu (LSE: INTU.L - news) , which owns some of Britain's biggest shopping centres including the Trafford Centre in Manchester, north west England, falls as low as 308.5 pence.

"We believe the new assets may be over-rented and offer little prospects for earnings growth," says Oriel Securities analyst John Cahill.

"Management had said it would finance acquisitions via a rights issue and debt at its recent full year results, but we had not expected this to be so heavily discounted, to acquire such an anaemic rental stream."

The rights issue sees Intu issue two new shares for every seven existing shares at 180 pence per new share, representing a 42.5 percent discount to its divided-adjusted UK closing share price on March 19.

The money will help pay for the acquisition of a mall in Derby, in England's East Midlands region, the Sprucefield retail park in Northern Ireland, as well as a 50 percent stake in Merry Hill, a large shopping centre that sits to the west of Birmingham, from Westfield. The properties together generate a net annual rent of 54.9 million pounds.

($1 = 0.6014 British Pounds)

Reuters messaging rm://brenda.goh.thomsonreuters.com@reuters.net