Monday 24 September 2018

Dundrum owner's shares slump as French bidder walks

Dundrum Town Centre
Dundrum Town Centre

Jack Sidders

Shares in company that operates and part-owns Dundrum Town Centre and Swords Pavilions plunged yesterday, after a French would-be buyer walked away.

UK-based and London listed Hammerson's stock dropped as much as 14pc in London trading after Klepierre abandoned its pursuit of the UK company - a deal that would have created one of the largest retail-property owners in Europe.

Klepierre's decision paves the way for Hammerson to proceed with its own acquisition of rival Intu Properties which it put on hold last week while the French bid played out.

The French landlord had made two verbal bids for Hammerson, both of which were rejected by the UK mall owner. The second offer valued the company at about £5bn (€4bn).

"The board of Hammerson did not provide any meaningful engagement with respect to the increased proposal and, after careful consideration, Klepierre has concluded that it does not intend to make an offer," the Paris-based company said in a statement.

Klepierre had been seeking to exploit weakness in Hammerson's share price caused by concerns over online rivals and the company's plan to acquire Intu.

The offer, which values Intu at about £3.5bn, would create Britain's largest publicly traded landlord.

Intu shares rose as much as 2.9pc to 216.70 pence, the highest in three weeks.

That's despite wider fears for the health of the UK's brick-and-mortar retail sector.

"The pall over UK retail calls into question the wisdom of increasing exposure when structural change in retail is at its most destructive," Bloomberg Intelligence analyst Sue Munden wrote in a note, referring to the Intu purchase.

However, the deal would give Hammerson a chance to "enhance the quality of the company's capital-constrained malls, unlocking potential in the £21bn of combined assets", she said.

Hammerson's shares had been buoyed by Klepierre's efforts to buy the company.

The stock had gained 19pc since it received an initial offer from Klepierre.

Hammerson's board carefully evaluated Klepierre's second bid, which "very significantly undervalued" the company, the UK landlord said in response to Klepierre's announcement.

Hammerson said it will continue to engage "intensively" with shareholders. (Bloomberg)

Irish Independent

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