Hammerson withdraws ​its ​offer for Intu

London - UK shopping centre giant Hammerson has called off its proposed 3.4 billion pound deal with smaller rival Intu, citing a weak market and a disconnect between share price and the value of its business.

In a statement issued this morning, the board of Hammerson noted that it “firmly believed in the strategic rationale of combining Intu’s portfolio with Hammerson”, but following the current state of the UK market, which has financially weakened, the board has decided that the proposed acquisition of Intu is “no longer in the best interests of shareholders.”

Hammerson calls off its acquisition of Intu

Over the past few months, a growing number of UK retailers have either entered into administration or applies for CVAs, including the likes of Toy R Us, New Look and Select. Although the board at Hammerson feels that it has proven its portfolio to be “well-positioned” to thrive in the current conditions, there remains a heightened level of risk linked to the UK retail property sector as a whole as consumer confidence in the UK remains subdued.

"Hammerson is an ambitious company with a disciplined approach to the pursuit of compelling investments to strengthen its portfolio. It is clear that the heightened risks to the Intu Acquisition now outweigh the longer-term benefits”

"It is also apparent from extensive engagement with shareholders, in particular in recent weeks, that there is a wide range of views on the merits of the Intu acquisition,” added the company in the statement. “As a result, the Board of Hammerson has concluded that the heightened risks associated with the Intu acquisition outweigh the long-term rewards that can be expected in comparison to other strategic options open to the company."

Hammerson has notified Intu of the withdrawal of the recommendation that its shareholders vote in favour of its acquisition of Intu, and its offer for the smaller UK property company will lapse if its shareholders do not approve of the deal. "After careful consideration, the Board has concluded it is no longer in the best interests of shareholders to carry out the Intu Acquisition,” said David Tyler, Chairman of Hammerson.

In the same statement, Hammerson underlined its committed to strengthen its prospects as a standalone business, fine-tuning its strategy of creating the best in class retail destinations that deliver consistent financial returns. “In recent weeks, investors have told us they share our view of the exceptional quality of our portfolio and that they have great confidence in our management team. The Board has complete conviction in Hammerson's prospects as a standalone business as we pursue our plans for future growth,” added Tyler.

Photo: Bullring, Birningham, owned by Hammerson. By Sunil060902 [CC BY-SA 3.0 (https://creativecommons.org/ licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], from Wikimedia Commons