Hammerson is to acquire Intu Properties to create what the two companies say will be a £21bn pan-European portfolio of high-quality retail and leisure destinations.
The deal, valued at £3.4bn, will involve the enlarged group undertaking a disposal programme of at least £2bn to “strengthen its balance sheet and provide liquidity to reinvest in higher-return opportunities”.
The two companies said that the combined entity would be in an enhanced position in its geographic markets and across retail formats, with a more efficient and adaptable platform.
The enlarged group will be led by Hammerson chief executive David Atkins and chief financial officer Timon Drakesmith and will be called Hammerson.
Hammerson chairman David Tyler will become the chairman of the enlarged group and John Whittaker, deputy chairman of Intu, will become deputy chairman of the enlarged group.
John Strachan, chairman of Intu, will join the board of the enlarged group as a senior independent director. Overall six directors will be nominated by Hammerson and four directors will be nominated by Intu.
Tyler said: “This transaction will deliver real value for shareholders. The financial strength of the enlarged group and its strong leadership team will make it well-placed to take advantage of higher-growth opportunities on a pan-European scale.”
David Atkins, chief executive of Hammerson, said: “Bringing together the high-quality portfolios of both companies creates a leading pan-European platform of desirable retail and leisure destinations that are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities.
“I hold Intu’s high-quality centres in high regard and I look forward to working with a strengthened team to enhance the performance of our entire portfolio.”
John Strachan, chairman of Intu and proposed senior director of the enlarged group, said: “A combination of Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders. Intu offers high-quality retail and leisure destinations in the UK and Spain, which when merged with Hammerson’s top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe’s leading cities.
“I am proud of the financial and operational success that Intu’s management team has delivered and pleased to see that the Intu brand will continue.”
The deal values Intu’s shares at 253.9p – close to a 28% premium to its closing price of 199p on Tuesday.
As a result, Intu’s share price has climbed by 19.8% so far this morning, its market cap reaching £3.23bn. Hammerson’s share, however, has fallen by 2.1%.
Their combined market cap at the time of writing is £7.38bn – considerably more than Landsesc’s £7bn and British Land’s £6.5bn.
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