Shopping centre owner Hammerson has rebuffed a £5bn takeover offer by French rival Klépierre, sparking concerns that a bidding war could threaten its proposed merger with UK peer Intu.
It emerged on Monday that Kléppiere had approached Hammerson earlier this month with an offer of 615p per share, a premium of more than 40pc to its closing price on Friday. But Hammerson rejected the offer, saying the proposal was “wholly inadequate and entirely opportunistic” and represented a “calculated attempt to exploit the disconnect between our recent share price performance and the inherent value of our unique and irreplaceable portfolio”.
Shares in Hammerson opened 28.12pc higher at 560p on Monday regardless.
In December, the company announced that it had proposed a £3.4bn takeover of Intu, a deal which would give it control of almost all of the UK’s prime retail stock.
However, shareholders had expressed concern that the deal could dilute Hammerson’s portfolio, which currently includes the Bullring in Birmingham, sending the price of its stock down 19pc since the tie-up was announced.
Hammerson said on Monday that it remained “fully committed” to pursuing the Intu deal, despite concerns that its investors could vote against the all-share purchase next month.
Analysts had predicted that a third party could enter the deal, and a potential swoop by Kléppiere could yet derail the Intu merger.
Matthew Saperia, analyst at Peel Hunt, said: “Despite the board rejection [of the Kléppiere offer], Hammerson is now in play and the likelihood of its proposed merger with Intu Properties proceeding has decreased considerably.”
He also pointed out that the reasons Hammerson gave for rejecting the French offer – namely setting out its valuable portfolio – were the same reasons why the Intu merger was unpopular among investors.
Intu’s portfolio is thought to need more money spent on it to maintain it, and is more UK-focussed than Hammerson, which also owns a number of prime shopping centres in continental Europe.