The Intu board agreed to Hammerson’s offer in December 2017 but several Hammerson shareholders subsequently indicated that they did not support the board’s initiative given the decline in the market.
Hammerson has today said that it is withdrawing its recommendation to shareholders to vote in favour of the Intu acquisition.
Hammerson said that the board had “reassessed the proposed acquisition of Intu in light of updated information on current market dynamics in the UK”. Since the deal was agreed the High Street retail market has softened and the Hammerson board “has now concluded that the proposed Intu acquisition is no longer in the best interests of shareholders”.
Intu said that Hammerson's explanation for its withdrawal was 'unsatisfactory'.
Intu’s portfolio of shopping centres includes Lakeside Thurrock, Merry Hill in Dudley, the Gateshead Metrocentre and the Trafford Centre in Manchester.
The Hammerson board said: “Despite the resilience of Hammerson's portfolio and strong operating metrics in Q1 2018, the equity market's perception of the broader UK retail property market has deteriorated since the start of the year. This has led to a disconnect between the company's share price and the fundamental value of its business and prospects. This perception has been intensified by market concerns over the extended period of time that it would take to complete the transaction and realise longer-term returns from the Intu acquisition.”