By Eamon Quinn
UK-based property giant Hammerson, which owns half of Dundrum Shopping Centre, Ireland largest mall, has rejected a £4.88bn (€5.53bn) bid from a rival European shopping centre operator, France’s Klepierre.
Hammerson shares soared by 25% in London, while Klepierre shares fell 4% in Paris.
Hammerson is also a substantial retail landlord across Ireland. It owns half shares in the Swords Pavillions, in the Ilac Centre in Dublin city centre, and controls the nearby 1916 battlefield site.
It owns outright the Abbey Retail Park in Belfast and has a significant minority stake in the Kildare Village.
In Britain, it owns large minority stakes in Brent Cross in London and in Birmingham’s Bullring, and in France, it has a number of retail centres. It said the bid by French company Klepierre “significantly undervalues” the company.
Klepierre, with a market value of €10.48bn, is the larger of the two property groups. It controls shopping centres across France, including at the Saint Lazare railway station in Paris.
It also has significant centres across the rest Europe, including in Denmark, Sweden, Italy, Turkey, and the Czech Republic.
“The board of Hammerson has unanimously rejected the proposal on the grounds that it very significantly undervalues Hammerson, its track record of delivery, the quality of its portfolio, its market positions, and the opportunities it has for future value creation,” Hammerson said.
In the Republic, Hammerson in its latest fiscal year generated net rental income of £34.8m (€39.4m) from its properties, up 7.4% increase on the previous year.
Much of that increased income was generated at Dundrum Town Centre, which it co-owns with Allianz, where additional income arose from the settlement of rent reviews and new lettings, as well as increased car park space.
Across all its operations, it had rental income of £370.4m in 2017, and an adjusted profit of £246.3m, an increase of 6.8% from 2016.
In December, Hammerson said it was looking to expand in Ireland. Its co-owner at the Ilac is Irish Life. Irish Life and Iput own the other half share of Swords.