Shares in Hammerson (LON:HMSO) have lost ground in London this morning, as the company inked a deal to acquire London-listed peer Intu Properties (LON:INTU) in an all-share offer. The Times noted in its coverage of the news that deal is set to create the UK’s largest property company.
As of 09:54 GMT, Hammerson’s share price had given up 2.06 percent to 523.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.14 percent lower at 7,317.20 points. Intu’s share price meanwhile has rallied 19.10 percent to 237.00p.
Hammerson and Intu to merge
Hammerson and Intu announced in a statement this morning that they had reached agreement on the terms of a recommended all-share offer by Hammerson to acquire the entire issued and to be issued share capital of Intu. The deal is expected to create a £21 billion pan-European portfolio of retail and leisure destinations.
Under the terms of the deal, Intu’s shareholders will receive 0.475 shares in the new business for each of their shares. That values Intu at £3.4 billion, marking a premium of around 28 percent based on yesterday’s closing prices.
‘Compelling strategic rationale’
“The Boards of Hammerson and Intu believe that there is a compelling strategic rationale for the Acquisition, which will bring together their high-quality retail property portfolios and their combined expertise to create a leading European retail REIT with a strong income profile and superior growth prospects,” the companies commented in the statement.
The Enlarged Group will be led by Hammerson boss David Atkins, CEO, and Timon Drakesmith, CFO and will be called Hammerson. David Tyler, the Chairman of Hammerson, will be the Chairman of the Enlarged Group. John Whittaker, Deputy Chairman of Intu, will become Deputy Chairman of the new REIT.