Deal is off and Intu plunges

The share price of JSE-listed UK shopping centre owner Intu Properties plunged by more than a third yesterday, after a £2.9 billion buyout offer to take the group private collapsed.

Intu announced in a SENS statement that a consortium of investors that were looking at buying the company had decided against it. The consortium included UK-based Peel Group, Saudi Arabia’s Olayan Group and Canada’s Brookfield Property Group.

The collapse of the deal saw Intu’s share price nosedive 37% at one point. It’s the second buyout deal in less than a year to fall through, after property giant Hammerson withdrew its £3.4 billion offer in April.

While Intu did not specifically mention Brexit, the UK’s messy exit from the EU seems to have claimed another victim. Retailers and landlords in the UK are feeling the impact of the Brexit fallout, with several retail closures and consumer confidence falling to a year low. UK department store chain House of Fraser, which underwent administration earlier this year, recently announced it would be closing four of its stores at Intu shopping centres.

In the latest buyout offer, the Peels-led consortium approached Intu on October 4, which led to Intu forming an independent committee to consider the deal. The committee granted the consortium access to certain due diligence material on October 19.

“Good progress was made with the consortium over the following weeks, with three extensions to the original firm offer deadline of November 1 made to enable them to continue their work, the last to November 30,” Intu explained.

“The consortium confirmed to Intu on November 21 that its legal, tax, accounting and commercial due diligence was largely complete and nothing had arisen from its due diligence workstreams that would lead it to alter the terms of its revised indicative proposal of 210.4 pence per share (exclusive of the 4.6 pence interim dividend which has since been paid),” it said.

“However, the consortium announced today that, given the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets, it’s not able to proceed with an offer within a timeframe manageable in the confines of the Code timetable,” added Intu.

Consortium is not able to proceed with an offer within a timeframe manageable in the confines of Code timetable.

Intu