By Eamon Quinn
French shopping centre owner Klepierre raised its takeover offer for rival Hammerson, but the London-listed company said it still undervalued its worth and advised shareholders to reject it.
Hammerson said the proposed offer, made up of 50% in new Klepierre shares and the rest in cash, was only a marginal increase on Klepierre’s offer, which was worth £4.9bn (€5.6bn) and which it rejected in early March.
The company is a major retail owner in Ireland. In a business update, the property group last week hailed the strong performance of Dundrum — which at 124,000 sq metres is the country’s largest shopping centre — and its other Irish assets for delivering “a particularly strong leasing performance”. It has assets here worth €1.26bn, or around a 10th of its overall property value, of almost €12.1bn.
With Allianz, Hammerson owns half of Dundrum Shopping Centre; a half share with Iput and Irish Life in the 46,000-square-metre Swords Pavillions; and, with Irish Life, half of the 30,000 sq metre Ilac Centre. It also 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.
While Hammerson, which in December agreed an all-share offer to buy smaller UK rival Intu Properties, rejected the latest Klepierre offer, chairman David Tyler said it remained open to discuss any proposal which properly reflected the value of the company.
Klepierre’s approach has threatened to disrupt Hammerson’s own plan to buy Intu, which owns the Trafford shopping centre in Manchester.
In Britain, Hammerson owns large minority stakes in Brent Cross in London and in Birmingham’s Bullring. In France, it has a number of retail centres.
It said last week it was weathering the difficulties faced in UK retailing, including the restructuring and administrations of New Look and Toys R Us in Britain. Hammerson has net debt of £3.4bn.
Hammerson shares initially rose as much as 2.3%, but then fell back and were down 0.5% in late trading, valuing it at £4.16bn (€4.77bn).
Klepierre is much bigger, at €10.36bn. Its shares fell slightly in Paris. Analysts were not surprised by Hammerson’s share price fall.
Broker Stifel noted “the apparent lack of conviction from Klepierre, indicating that a substantially higher formal offer will not be forthcoming”.
Liberum Capital called the Klepierre proposal “underwhelming”.
- Additional reporting Reuters