Bidders ditch £2.8bn Intu takeover deal

Intu takeover

A £2.8 billion bid to acquire Intu has been scrapped after the suitors blamed “uncertainty around current macroeconomic conditions and the potential near-term volatility across markets”.

The news comes after Intu gave the consortium of investors – led by Intu deputy chairman John Whittaker, with The Peel Group, Saudi Arabia’s Olayan Group and Canada’s Brookfield Property Group – three extensions on their deadline to finalise their takeover bid.

The shopping centre giant said market conditions meant the consortium could not continue with the proposed offer within the timeframe set out by the City takeover rules.

Whittaker, who is also chairman of The Peel Group, said: “We remain fully committed to Intu Properties as a long-term, strategic shareholder, as demonstrated by our participation in the consortium’s possible offer.

“Intu’s portfolio of super regional and prime city centre shopping centres is trading strongly and benefiting from the retailer store rationalisation process that is currently under way in the UK.

“Physical retail continues to play a key role in all successful multi-channel retailer sales strategies and Intu’s national portfolio of centres enjoys some of the highest customer footfall in the country.”

Intu said: “Whilst market sentiment towards retail and retail property remains negative, Intu is confident of its commercial prospects which are underpinned by market leadership in UK regional shopping centres, clear focus on the highest quality assets and resilient operational performance in a challenging market.”

The firm, which operates 18 shopping centres across the UK, warned that recent high-profile retail casualties, such as House of Fraser, have hit its full-year rental income by about 1.5 per cent.

This left like-for-like growth at between zero per cent and one per cent, and Intu expected like-for-like rental income growth to remain between zero per cent and one per cent in 2019.

In October, the consortium made an initial offer of £2.85 billion for Intu, well beneath the £3.4 billion figure rival shopping centre Hammerson had considered paying for the retail property group before pulling out of talks in April.

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  1. For “market conditions” read ‘Brexit’.

    Also shopping centres are severely over-valued at the moment. As the need for physical retail space continues to abate there is going to need to be some serious re-alignment in rents which will have a knock on effect on overall values. These companies can only continue to demand silly money for a bit of floor space for so long.


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