(Author : Elias Jahshan)
A proposed £3.4 billion merger of shopping centre operators Hammerson and Intu is set to create one of the UK’s biggest property companies.
Hammerson has agreed an all-share takeover of rival Intu to bring the two firms under one roof and create a £21 billion shopping centre giant. The takeover deal represents a value of approximately 253.9p per Intu share, equivalent to £3.4 billion. The merged group will be led by Hammerson boss David Atkins and chaired by David Tyler.
Shareholders still need to approve the deal and will vote on it next year, with Intu having already secured 50 per cent of investor support. “This transaction will deliver real value for shareholders,” Tyler said. “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.”
Part of the merger includes a raft of cost cutting initiatives, such as offloading at least £2 billion worth of assets and targeting high growth markets such as Spain and Ireland. It will also result in Hammerson shareholders owning 55 per cent of the combined firm while Intu investors will control remain 45 per cent.
“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 chairman John Strachan said. “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.”
Hammerson owns shopping centres like the Bullring in Birmingham, Bicester Village, Cabot Circus in Bristol, Victoria Gate in Leeds, and Brent Cross in London. Meanwhile, Intu operates an eponymous chain of centres such as Lakeside in Essex and Trafford Centre in Manchester, as well as have co-ownership of St David’s in Cardiff. The merger comes as shopping centres continue to buck the trend of high streets being plagued challenges in footfall and retail sales that have been exacerbated since the Brexit vote.
Atkins said: “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.”
Source : retailgazette.co.uk