Shopping centre group mulls over £2.9bn offer
THE owner of some of Britain’s biggest shopping centres including Lakeside and the Trafford Centre could soon be taken private in a near-£3billion takeover.
Intu Properties, whose portfolio also includes Chapelfield in Norwich and Gateshead’s Metrocentre, has opened its books to a consortium led by billionaire property investor John Whittaker, the FTSE 250 firm’s deputy chairman.
Whittaker’s Peel Group, which already owns over a quarter of Intu, along with Saudi conglomerate Olayan Group and Canada’s Brookfield Property Group, followed up an indicative cash proposal of 205p per share earlier this month with a revised 215p.
This would be reduced to 210.4p to reflect an interim dividend due to be paid next month.
The informal offer values Intu at about £2.9billion, well below the £3.4billion that Hammerson, owner of Birmingham’s Bullring and Brent Cross in London, agreed to pay for it last year.
Hammerson later pulled the plug on buying its smaller rival after pressure from its shareholders amid concerns over the health of the British retail property market.
The consortium has until November 1 to either announce a firm intention to bid or walk away.
Intu shares jumped 22¼p to 200p as some observers suggested a higher price tag. Liberum analyst David Brockton said: “We struggle to see how the Intu Board will be able to recommend a cash offer below 239p.
“Management has repeatedly maintained that its prime retail assets are resilient and trading well with negligible impact from wider occupier weakness.”
Berenberg’s Kieran Lee said: “This approach was well timed; sentiment for both UK retail real estate investment trusts and the wider retail sector is at its most bearish, Intu has no long-term chief executive in place and its shares trade at a big discount to net asset value.
“A bid tacitly endorses our thesis that dominant assets in the right locations were being materially undervalued by the public market.
“We see a clear rationale for a bid and think this process is likely to complete.”