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Hammerson shares leap as Klepierre says property firm rejected its bid "in less than 24 hours"

Last updated: 01:23 20 Mar 2018 AEDT, First published: 19:23 19 Mar 2018 AEDT

Shopping centre
At the end of last year, Hammerson reached an agreement to buy shopping centres firm Intu Properties for £3.4bn

Hammerson PLC (LON:HMSO) saw its shares leap almost 25% higher on Monday after Klepierre announced that the FTSE 100-listed real estate investment trust had rejected a bid approach from the French shopping centre operator "in less than 24 hours", which the UK firm has called "entirely opportunistic".

In a statement confirming media speculation, Klepierre said its 615p a share offer, which represents a premium of around 40.7% to Hammerson's closing price last Friday, was made on March 8.

READ: Hammerson's £3.4bn takeover bid for Intu could raise competition concerns, says analyst

The French firm said it made the proposal "on a non-adversarial basis" and "with the intention of engaging in a constructive dialogue regarding a possible offer to acquire the issued and to be issued share capital of Hammerson on a standalone basis".

Klepierre added that Hammerson’s board had rejected its proposal in less than 24 hours on March 9.

At the end of last year, Hammerson reached an agreement to buy FTSE 250-listed shopping centres firm Intu Properties PLC (LON:INTU) for £3.4bn, a deal which will create a £21bn portfolio of retail developments across Europe.

Klepierre's approach "entirely opportunistic in its timing"

In a statement reacting to the Klepierre announcement, Hammerson said: “The approach by Klépierre is unsolicited and entirely opportunistic in its timing, and 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.”

The real estate firm also said it remains fully committed to the acquisition of Intu Properties which its board “continues to believe will deliver significant value for Hammerson shareholders.”

David Tyler, Hammerson’s chairman said: "It is a calculated attempt to exploit the disconnect between our recent share price performance and the inherent value of our unique and irreplaceable portfolio which is delivering record results.”

He added: “Klépierre is asking our shareholders to accept a price for their Hammerson shares which is not only at a significant discount to their book value but includes a large element of paper in a company which in our view has a lower quality portfolio and lower growth prospects. The Hammerson Board sees absolutely no merit in Klépierre's Proposal and has unanimously rejected it. The Board strongly advises shareholders to take no action."

In its own statement, Intu noted the response by Hammerson in relation to an announcement by Klépierre and also said no action is required and it will update shareholders if and when appropriate.

French bid "not quite as generous as it looks"

In afternoon trading, Hammerson shares were 24.6% higher at 544.9p. Intu shares were up 4.7% at 213.5p.

Independent retail analyst Nick Bubb commented: “Well, the share price of the embattled shopping centre giant Hammerson has slumped since it announced its agreed bid for its UK rival Intu Properties on Dec 8th, so the opportunistic 615p offer that French rival Klepierre has recently made for Hammerson is not quite as generous as it looks, but, with many of its fashion and department store tenants in some trouble, Hammerson is going to have work hard now to convince its shareholders of the merits of the Intu deal.”

 -- Adds Intu response statement; updates share prices --

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