Hammerson Intu takeover
April 18 (Reuters) - British shopping centre operator Hammerson has made a decision to pull out of buying smaller British rival Intu Properties and asked its increasingly sceptical shareholders not to back the planned 3.4 billion pound ($4.8 billion) deal.
Hammerson's initial bid of about $5 billion (€4 billion) had come as shopping-centre owners try to combine to cut costs and focus on premium properties.
"Despite the resilience of Hammerson's portfolio and strong operating metrics in Q1 2018, the equity market's perception of the broader United Kingdom retail property market has deteriorated since the start of the year", Hammerson said in its update.
Hammerson shares rose 3.5% to 510.8p at 08:22 BST while Intu shares dropped 6.4% to 195p. Moreover, the company also said that its shareholders had expressed concerns over the deal [we reported].
Several retailers and restaurants, including electronics business Maplin and burger chain Byron, have either fallen into administration or been forced to agree restructuring plans with their creditors in recent months.
Notwithstanding this the Hammerson Board has now concluded that the proposed Intu Acquisition is no longer in the best interests of shareholders.
David Atkins, Chief Executive of Hammerson, added: "Hammerson is an ambitious company with a disciplined approach to the pursuit of compelling investments to strengthen its portfolio".
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Intu said Hammerson's rationale for calling off the deal was "unsatisfactory" after reiterating its support for the takeover in March.
Klepierre said it would not make a formal offer because Hammerson "did not provide any meaningful engagement".
J O Hambro Capital Management, a top 20 Hammerson investor, said it was "pleased" and that "the board should be applauded for taking the hard decision to change direction from that laid out in December when the Intu merger was announced". A shareholder meeting is likely to be convened in the coming weeks. However, Hammerson said it would not hold its investor meeting if Intu and Britain's Takeover Panel agree.
The withdrawal of the recommendation alone will not cause a lapse of Hammerson's offer or terminate a co-operation agreement between the two companies, Hammerson said.
"The board has complete conviction in Hammerson's prospects as a standalone business as we pursue our plans for future growth".
"The board of Intu is entirely confident of Intu's commercial future and prospects", it said in its own statement to shareholders.
Liberum is one broker that backs Hammerson's change of tack.
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