Dundrum owner Hammerson ditches €4bn Intu takeover bid
Hammerson, the co-owner of the Dundrum Town Centre, has pulled plans for a £3.4bn (€3.9bn) takeover of rival Intu, citing a "disconnect" between Hammerson's own share price and the "fundamental value of its business and prospects" by the market.
Hammerson had announced last December that it had made an all-share offer to buy Intu.
But Hammerson's shares started a steady decline afterwards, receiving a boost in March when French firm Klepierre tabled an indicative offer for the company.
The takeover of Intu had been put on hold pending clarification from Klepierre about its intentions in relation to Hammerson. Last week, Klepierre abandoned its takeover efforts.
Apart from its stake in Dundrum, Hammerson also owns 50pc of the Ilac Centre in Dublin, and half the Pavilions Shopping Centre in Swords, north of the capital. Its assets also include a 41pc of the Kildare Village outlet mall and the group is planning a major development, called the Dublin Central scheme, on a tract of land around the capital's O'Connell Street.
Hammerson said its board had reappraised the planned acquisition of Intu in light of current market dynamics in the UK. It noted that a number of retailers had entered administration in the past five months, while consumer confidence has remained subdued.
"Whilst Hammerson has proven its portfolio is well positioned to weather the current environment, the equity market now perceives a heightened level of risk associated with the UK retail property sector as a whole," it noted.
"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," it added.
Intu said explanations given by Hammerson, which is led by chairman David Tyler and chief executive David Atkins, for withdrawing its recommendation were "unsatisfactory".
Concern over the deal has grown since Hammerson spurned Klepierre's approach and on the same day that the French company walked away, Dutch pension fund APG, one of Hammerson's biggest shareholders, said it would oppose the Intu takeover.
Another top 10 Hammerson investor said last week that Klepierre's offer of 635p per share had drawn a line in the sand for the company's bosses to match or better.
"Shareholders will be looking at management to come up with a credible plan to realise value," the investor said. (Additional reporting: Reuters)