Bullring owner Hammerson pulls back from takeover of Merry Hill operators intu

Bullring and Grand Central owner Hammerson said today that it is no longer recommending that shareholders vote in favour of its acquisition of Intu, which includes intu Merry Hill, just months after announcing an all-share offer for the firm.

The takeover would have created the UK's biggest property company, worth £21bn.

Hammerson said in a market announcement: "The Hammerson Board firmly believed in the strategic rationale of combining Intu's portfolio with Hammerson's, under the leadership of the Hammerson management team, and the opportunity it provided for value creation in the medium to long term.

"The board has now concluded that the proposed Intu acquisition is no longer in the best interests of shareholders."

Hammerson detailed the reasons it was withdrawing its recommendation, including that the stock market's view of the UK retail property market had "deteriorated" since the start of the year.

"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," it added.

Chairman David Tyler said: "After careful consideration, the board has concluded it is no longer in the best interests of shareholders to carry out the Intu acquisition.

"In recent weeks, investors have told us they share our view of the exceptional quality of our portfolio and that they have great confidence in our management team.

"The board has complete conviction in Hammerson's prospects as a standalone business as we pursue our plans for future growth."

Intu group company secretary Susan Marsden said it regarded as unsatisfactory the explanations given by the board of Hammerson for its withdrawal of its recommendation of the transaction, which Intu had been pursuing in good faith since its announcement on December 6 last year

"The board of Intu is entirely confident of Intu’s commercial future and prospects. The trading update issued yesterday underlined the key strengths of Intu’s business. Intu will further update shareholders in due course on its plans.

"The board of Intu will be meeting to consider Hammerson’s request not to convene a shareholders’ meeting to vote on the Intu transaction."

Following an approach by French shopping centres group Klepierre to buy Hammerson on March 19 Hammerson reaffirmed its intention to proceed with the Intu transaction stating that the board remains fully committed to deal which it believed would deliver significant value for Hammerson shareholders.

Klepierre last week said it does not intend to make a formal offer for Hammerson.

The group said its chairman Jean-Marc Jestin held a meeting with his Hammerson counterpart David Tyler on Monday to table a £5.04 billion proposal worth 635p per share.

However, it is walking away after Hammerson "did not provide any meaningful engagement".

Klepierre said: "The board of Hammerson did not provide any meaningful engagement with respect to the increased proposal and, after careful consideration, Klepierre has concluded that it does not intend to make an offer for Hammerson."

Hammerson had branded Klepierre's overtures as "wholly inadequate" and "entirely opportunistic".

Klepierre's decision to back off was thought to have paved the way for Hammerson's preferred option of the tie-up with rival Intu, which also operates the Trafford Centre in Manchester.