Intu Properties’ (LON:INTU) share price has soared in London in today’s session, finding support in a report in The Sunday Times which suggested that private equity firm Orion Capital Managers was looking to buy the shopping centre operator. The news after the London-listed company posted its interims in July, saying that it had seen a challenging first half.
As of 13:37 BST, Intu’s share price had added 10.30 percent to 40.26p. Despite today’s advance the group’s shares have given up more than 70 percent of their value over the past year.
M&A prospects for Intu
The Sunday Times reported yesterday that Orion Capital Managers, run by Aref Lahham, is understood to be in the early stages of seeking partners for a buyout of Intu Properties. The news comes at a sensitive time for the London-listed property group which has been hit by a string of insolvencies from retailers such as Debenhams and Sir Philip Green’s Arcadia Group.
“There are three arguments for caution (for buyers): the NAV (net asset value) per share figure at Intu continues to go lower,” Russ Mould, investment director at AJ Bell, commented, as quoted by Reuters, adding that the London-listed company has £4.7-billion in net debt and bids for Intu have failed before.
Mould further reckons that a takeover of Intu could prompt a wider reappraisal of the sector, especially for those firms with big exposure to retail, with Hammerson (LON:HMSO), Land Securities (LON:LAND) and Capital & Counties (LON:CAPCC) “tarred with the same retail-and-Brexit brush to varying degrees and all trade at big discounts to NAV”.
Analyst ratings update
The 18 analysts offering 12-month targets for the Intu share price have a median target of 48.50p, with a high estimate of 118.00p and a low estimate of 28.00p. As of September 6, the consensus forecast amongst 20 polled investment analysts covering the London-listed group has it that the company will underperform the market.