Brexit was key issue in Intu buyout failure says CEO

By

Sandra Halliday

Published
Nov 30, 2018

Brexit was the big issue that derailed an international consortium’s plan to buy shopping centres giant Intu for £2.9 billion.

The owner of the Trafford Centre in Manchester and Metrocentre in Gateshead was the subject of a takeover approach by some of its own shareholders. Peel Group and Saudi Arabia’s Olayan Group (which own 30% between them) and Canadian firm Brookfield Property had been prepared to pay 210.4p per share.

But they abruptly pulled out this week with Intu chief executive David Fischel saying: “There is only one reason this deal was called off and that was Brexit. In the last couple of weeks for Brookfield, as an outsider looking in, how can they make a real decision about investing in the UK right now and weigh up the risks?”

That's significant because it's just about the strongest statement anyone has made from within the retail community about the direct, negative impact of Brexit, even before the UK's actual withdrawal from EU has happened.

Coming on the same day that it emerged that Unilever's CEO is stepping down, it added to the general concerns around what will happen next year. CEO Paul Polman’s exit may not been seen as a direct consequence of Brexit. But his proposal to list the firm mainly in the Netherlands (which shareholders didn’t approve) was seen as a defensive one in which Brexit was a factor. His failure to push the idea through was part of his decision to retire and means one of industry's most respected execs is an indirect victim of Brexit.

Back with Intu, Fischel said that the consortium was ready to press the button to proceed with the takeover until Prime Minister Theresa May’s Brexit plan was unveiled last week and “all hell broke loose,” the Guardian reported. “Inward investment into the UK until things have stabilised is going to be very difficult,” Fischel added.

After the announcement of the talks failure, Intu shares lost 40% (or £1 billion) and rivals Hammerson and Land Securities shares also dropped.