Hammerson is set to takeover shopping centre rival Intu for £3.4bn in a deal agreed by both boards.
The combined group, which will retain the Hammerson name, will have a £21bn pan-European retail portfolio. The offer equates to 253.9p per Intu share, a 26.9% premium to Intu’s closing share price last night but a 34% discount to the latest EPRA NAV of 385p.
Hammerson has received backing for the deal from investors representing 50.6% of Intu’s shares, including letters of intent to vote for the deal from Peel and the Intu directors.
The merged company will be led by Hammerson’s chief executive David Atkins, while his current chief financial officer, Timon Drakesmith, will continue in his role.
Atkins said: “This marks an exciting milestone in the history of Hammerson. Bringing together the high-quality portfolios of both companies establishes Hammerson as a larger, leading European retail REIT, enhances shareholder returns and supports opportunities for long-term growth. 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. I hold Intu’s high-quality centres in high regard and I look forward to working with a strengthened team to enhance the performance of our entire portfolio.”
David Tyler, chairman of Hammerson, will continue in his role, while John Whittaker, deputy chairman of Intu, will become deputy chairman. John Strachan, chairman of Intu, will join the board of the company as senior independent director. Overall, the board will have six directors nominated by Hammerson and four directors nominated by Intu.
The combined group will seek growth opportunities across Europe, especially in Ireland and Spain, Europe’s two fastest growing economies. It will also embark on a disposal programme of at least £2bn.
Tyler 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.”
Strachan added: “A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders. 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. I am proud of the financial and operational success that Intu’s management team has delivered and pleased to see that the Intu brand will continue.”
Under the terms of the deal Intu shareholders will receive 0.475 new Hammerson shares, based on last night’s closing price of Hammerson’s shares of 534.5p. The deal will result in Hammerson shareholders owning around 55% of the combined group, with Intu shareholders owning the remaining stock.
Source: Property Week