Possible bid for Intu sends shares rising
SHARES IN Intu Properties soared more than 37 per cent yesterday after a consortium including British billionaire John Whittaker and Canada’s Brookfield Asset Management said it was considering a bid for the shopping centre owner.
Peel Group, which is the investment vehicle of the Whittaker family, Saudi Arabia’s Olayan Group and property investor Brookfield said on Thursday they were weighing a cash offer for the London-listed shopping centre company.
Intu is the owner or part-owner of 18 centres across the UK including the Trafford and Arndale Centres in Manchester and Metrocentre in Gateshead.
Peel and Olayan, the conglomerate founded by the Olayan family, together hold 29.9 per cent of the business, the consortium said.
The consortium now has until November 1 to make a firm offer or walk away.
Rival shopping centre operator Hammerson, which owns Victoria Gate and Victoria Quarter in Leeds, shelved a £3.4bn takeover of Intu in April due to heightened concerns among its investors about the British retail sector.
“A cash bid for Intu should warrant serious consideration by its shareholders... Intu’s prospects as a standalone entity are threatened by above average financial leverage which limits its ability to self-fund growth and maintenance capex,” Liberum analysts said.
“A cash bid could offer shareholders a chance to salvage value ahead of a potential cash call or dividend cut, under a new CEO.”
Intu, which has a market value of £2bn, said it had not received an approach from a consortium. But it said it had set up an independent committee to consider any approach.
Intu shares traded 30 per cent higher at 192.50 pence yesterday morning, close to the levels they stood at after Hammerson dropped its takeover plan in April.
Analysts ruled out a competitive bid, given the size of the consortium’s shareholding. “Taking Intu private makes sense, enabling the owners to deal with the inherent issues outside the public glare,” Peel Hunt analysts said, adding any offer would be at a material discount to net asset value.
“An offer at 190-200p per share may therefore provide the consortium with potential upside, but would it be attractive enough for the remaining Intu shareholders?”
Intu’s other major shareholders include the Public Investment Corporation and Coronation Fund.
Intu’s chief executive stepped down in July after the company swung to a loss and warned of lower rental income growth.