Shopping mall giant braced for takeover battle

THE British owner of Birmingham’s Bullring shopping centre and London’s Brent Cross will give a crucial trading update this week as it fights off a french predator.

Analysts are expecting Hammerson to underline the strength of its business after it rejected a £5bn advance from Paris-based Klepierre, branding it ‘unsolicited and entirely opportunistic’.

At the same time, it is trying to prop up flagging shareholder support for its own £3.4bn bid for rival Intu, which owns the Metro Centre in Gateshead and Trafford Centre in Manchester.

Retail landlord Hammerson says the deal to buy Intu will make it the undisputed market leader in the UK, but the deal has not proved popular with investors, with shares tumbling by more than 17pc in the months after it was announced. In contrast, the £4.9bn proposal from Klepierre sent them soaring 25pc.

It has left Hammerson fighting a rear-guard action against its would-be foreign suitor. Sources close to Klepierre have said it is ‘not going away’ and it is understood to be lobbying shareholders behind the scenes.

Hargreaves Lansdown analyst George Salmon said the City will be expecting an explanation for Hammerson’s thinking on Thursday, when it publishes its firstquarter trading update. He added: ‘ It’s been a rollercoaster few months at Hammerson. In rejecting the offer from Klepierre, Hammerson’s board described it as “entirely opportunistic” – the update will give the group a platform to show exactly why.’

Hammerson’s update will come at a tough time for the company, which has been relegated to the fTSE 250 after seeing its share price slide.

That is partly due to growing concerns about the tough conditions gripping High Street retailers, with some of Hammerson’s fashion and department store tenants in trouble as they struggle to fend off competition from nimbler online rivals. Last month, fashion chain Next said it had been through its worst year in a quarter of a century, while rival New Look is poised to close stores.

Hammerson announced a 7pc rise in rental income for the year to December 31 to £370.4m, up from £346.5m the previous year.

Graham Spooner, investment research analyst at The Share Centre, said: ‘It has been an eventful past few months for the commercial property developer. All of this has occurred against a difficult background for property developers focused on the retail sector, with signs of weaker sales on the High Street.’