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Intu confirms £2.8bn offer from Peel-led consortium

By Frank Prenesti

Date: Friday 19 Oct 2018

Intu confirms £2.8bn offer from Peel-led consortium

(Sharecast News) - Shopping centre owner Intu on Friday confirmed it had received an approach from a consortium led by one of its senior directors to buy the company at 210p a share, valuing it at £2.8bn.
Intu said deputy chairman John Whittaker's Peel Group, which already holds around 27% of the firm, had teamed up with Saudi conglomerate Olayan Group and Canary Wharf owner Brookfield Property.

The consortium had initially offered 205p a share, which was raised to 215p after talks between the two parties. The 210p factors in dividend payouts in November, Intu said.

"Both proposals also included a number of pre-conditions and there can be no certainty that any such pre-conditions will be satisfied or waived, that any offer will be made or as to the terms of any such offer or that any offer, if made, will complete," Intu said.

It added that it intended to issue a trading update for the period from 1 July 2018 "as soon as practicable", which will include the outcome of an updated independent valuation of its investment and development properties.

The offer comes six months after the collapse of an agreed £3.4bn merger between Intu and rival Hammerson.

Intu shares, which had fallen around 30% since the collapse of the bid and are down 45% since the start of 2017, surged 25% to 186.48p earlier this month. With 17 shopping centres around the UK and Europe, Intu's net asset value stood at 309p per share at the end of June.

Intu at the half year stage had a huge £4.7bn of net debt. London takeover rules require the consortium to make a firm intention to make an offer by 5pm on 1 November.

As Hammerson has rejected an approach from France's Klépierre, there is speculation that Peel's interest could bring other buyers out of the woodwork.

Klepierre said in April that it was still interested in acquiring assets in Britain after abandoning a £5bn approach for Hammerson, accusing the British property company of failing to provide "meaningful engagement" over a potential deal.

Analysts at Citigroup said "the value of Intu could be attractive to others", mentioning Klepierre and its "informal" bid for Hammerson that did not proceed and Franco-Dutch giants Unibail-Rodamco-Westfield, which "are busy" integrating Westfield.

"With Peel as the largest shareholder now in a consortium with Brookfield it would appear other bidders would have to venture down the less desirable hostile route," Citi said.

Broker Numis felt there was "limited likelihood of a bidding war", noting that John Whittaker is "a special purchaser given his 7 years spent as deputy chairman and former ownership of jewel in the crown Trafford Centre".

Analysts said a bid "would not be without complications", with Intu "over-leveraged" at peak valuations at 49% loan-to-value, its legacy debt structure "expensive to reprofile", and the business facing a "highly challenged outlook over the next few years".


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