Tuesday 24 April 2018

Hammerson to buy Intu creating a £21bn retail real estate investment trust

Hammerson owns Dundrum Town Centre equally with German insurer Allianz
Hammerson owns Dundrum Town Centre equally with German insurer Allianz
Ellie Donnelly

Ellie Donnelly

Retail specialists Hammerson are to buy Intu Properties creating a £21bn pan-European retail real estate investment trust (REIT), which will be one of the largest retail real estate stocks in Europe.

The boards of both companies have agreed that, following the acquisition, the enlarged group will be better placed to enhance its position in its geographic markets and across its retail formats.

Management says that it will sell £2bn of predominately UK assets, and invest most of the proceeds in Ireland and Spain.

This move will give the company enhanced flexibility for future projects such as Dundrum Phase 2, Philip O’Sullivan, economist at Investec, said.

The acquisition will create a group called Hammerson Plc.

David Tyler, chairman of Hammerson, will become chairman of the Hammerson Plc, while John Whittaker, deputy chairman of Intu, will become deputy chairman of Hammerson Plc.

“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,” David Tyler said.

The terms of the acquisition represent a value of approximately 253.9 pence per Intu share, equivalent to £3.4bn for the entire issued and to be issued share capital of Intu.

The acquisition will result in Hammerson shareholders owning approximately 55pc of the issued share capital of the enlarged group and Intu shareholders owning approximately 45pc of the issued share capital of the enlarged group (based on the fully diluted share capital of Hammerson and Intu).

“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,” John Strachan, chairman of Intu said.

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