UK property investment firm in £3.4bn merger with rival

News


06 Dec, 2017

UK property investment firm in £3.4bn merger with rival

The owner of London’s Brent Cross, Hammerson, has agreed to a £3.4bn takeover of smaller rival Intu.

The deal will create the UK’s biggest property company worth £21bn, with Hammerson shareholders receiving a 55% lion’s share in the new firm. The remaining stake (45%) will go to Intu shareholders.

The new company will retain the Hammerson name and will be run by the firm’s current boss and chairman, David Atkins and David Tyler respectively.

Following the new, the chairman said: "This transaction will deliver real value for shareholders. The financial strength of the enlarged group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale".

The company’s boss, Atkins, reiterated the chairman’s stance saying: "The acquisition creates a leading pan-European platform of desirable retail and leisure destinations which are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities.

Intu owns a number of shopping centres across England such as Intu’s Lakeside in Essex, Manchester’s Arndale Centre and the Metro Centre in Gateshead. These major outlets will now be run under one firm under the same roof - so to speak - as Hammerson’s famous Bullring shopping centre in Birmingham and the Bicester Village designer outlet.

John Strachan, chairman of Intu will be hoping the transaction will be an added boost to Intu’s sales.
"Intu offers high-quality retail and leisure destinations in the UK and Spain, which, when merged with Hammerson's own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe's leading cities", he said.

News of the deal comes as shopping centre owners struggle with the rise of online shopping and faltering retail sales amidst an economic slump.

Hammerson’s £3.4bn offer amounts to a value of 253.9p per Intu share and comes with a 28% premium on its closing price on 5 December. Shareholders will vote on the deal next year, although more than half of Intu’s investors have already agreed to backing the transaction, the Financial Times reports.

Following news of the offer, shares in Intu jumped to nearly 19% whilst Hammerson’s fell by 3%.

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