Chapelfield owner Intu to be bought in £3.4bn deal
PUBLISHED: 11:02 06 December 2017 | UPDATED: 11:02 06 December 2017
Copyright Archant Norfolk 2015
Chapelfield Shopping Centre owner Intu Properties has agreed a multi-billion pound merger with the company behind Birmingham’s Bullring.
Hammerson has agreed to buy all the shares issued for Intu in a transaction valuing the retail centre giant, which also operates Lakeside in Essex and The Trafford Centre in Manchester, at £3.4bn or roughly 253.9p per share.
The merger will create a £21bn pan-European property portfolio.
Last month Intu sold a 50% stake in Norwich’s Chapelfield centre to private equity firm LaSalle Investment Management.
The combined group will be led by Hammerson boss David Atkins and chaired by David Tyler.
Shareholders will vote on the deal next year, with Intu having already secured 50% of investor support for the all-paper deal.
Mr 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.”
The groups plan to slash costs, offload at least £2bn worth of assets and target high growth markets such as Spain and Ireland.
John Strachan, chairman of Intu, said: “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.”
The acquisition will result in Hammerson shareholders owning 55% of the combined firm and Intu investors the remainder.
The deal comes at a time when consumer confidence has taken a pounding following the Brexit vote, resulting in a sharp decline in retail sales.
However, shopping centres in city locations have tended to fare better than high streets during economic downturns.
Mr Atkins added: “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.”