// Intu shares surge on private equity takeover speculation
// Reports emerged over the weekend that Intu was exploring a buyout deal
// Orion Capital Managers, which has a 9.2% stake in Intu, is a front runner in the buyout process
Shares in Intu surged yesterday and this morning on the back of reports that the shopping centre giant could be bought out by shareholders.
Over the weekend it was revealed that Intu could be taken private through a a buyout deal after the shopping centre giant endured a challenging trading period across its portfolio.
According to The Sunday Times, private equity firm Orion Capital Managers is a front runner with owner Aref Lahham understood to be in the early stages of seeking partners to create a consortium for the buyout process.
Orion Capital currently holds 9.2 per cent of shares in Intu, which operates shopping centres around the country like Manchester’s Trafford Centre and Intu Lakeside in Essex.
The news prompted shares in Intu to jump almost 20 per cent in early trading yesterday, from just under 36p to 43p.
Shares were then pared back during the day to a 10.5 per cent rise at 40.3p, giving Intu a market value of £548 million.
This morning the shares experienced another spike, this time at almost four per cent and peaking at 41.9p.
At the time of print, Intu shares were trading at 41.6p, 3.17 higher than this morning’s opening price of 40.3p.
The uptick in shares comes after almost a year of gradual decline in share value for Intu, which has not been able to top the high of 201.5p last October.
In order to launch a successful takeover bid of the shopping centre giant, Orion Capital would need to work with other shareholders like John Whittaker’s Peel Holdings, which has a 27.3 per cent stake, and Saudi Arabia’s Olayan Group, which has a stake in Peel.
If a buyout was completed, it would help Intu avert breaching debt covenants on over £1 billion of debt.
This would not be the first time Intu has been eyed by potential bidders.
Last year, Peel, Olayan and another Intu shareholder Brookfield attempted to make the firm private, but failed after lenders became nervous.
There was also a failed merger attempt with rival shopping centre giant Hammerson.
Intu has not commented on the Orion Capital buyout speculation.
Intu recently revealed that like-for-like net rental income dropped 7.7 per cent to £205.2 million in the six months to June 30, which it attributed to a wave of store closures and CVAs from major retailers in recent months.