Hammerson-Intu merger could get complicated as Klepierre makes bid

By

Sandra Halliday

Published
Mar 19, 2018

While UK shopping mall giants Hammerson and Intu are accelerating towards their planned merger, the plans could be impacted by the arrival of European player Klepierre, with reports now emerging that it made a bid for Hammerson earlier this month.

The French company operates shopping centres in 57 cities globally and was prepared to pay 615p a share for Hammerson. However the UK company quickly rebuffed the preliminary offer.

But is that the end of story? Hammerson shareholders will want to hear more about the bid that would have involved cash and shares and represented more than a 40% premium to the 437.1p price at which Hammerson shares closed on Friday last week.

With the offer valued at £4.88 billion, on Monday Hammerson shares Rose 27% in early trading to reach 553p.

However Hammerson said that the Klepierre offer significantly undervalued the company and it remains committed to its merger with Intu.

Hammerson and Intu had agreed their deal in December, which involves Hammerson shareholders owning 55% of the merged company and Intu shareholders owning the rest.

If the merger goes ahead it will create the UK's second largest property company.

That's really important for fashion retailers globally because Hammerson and Intu between them own some of the most prominent malls in Britain and beyond.

Their properties include Bicester Village, the Bullring in Birmingham, Brent Cross shopping centre, and Manchester's giant Trafford Centre.

The merger makes sense for the two companies that have been as affected by consumers switching their interest to online shopping as retailers themselves have. 

But there have been concerns that the deal would dilute Hammerson’s upmarket appeal and increase its exposure to the troubled UK market where Intu is focused. And this has led its shares down 20% so far this year.