A 253.9p all-share takeover offer from Hammerson (HMSO) for Intu Properties (INTU) looks set to deliver a shopping centre investor with more than £21bn worth of assets across Europe. But will the £3.4bn deal create or destroy value for shareholders?

Hammerson swooped after months of weakness in Intu’s share price, having fallen from 293.7p in February to a low of 195.9p at the start of December.

Under the takeover proposal, the enlarged business would operate under Hammerson’s name with its shareholders owning 55% and Intu shareholders the remainder.

Jefferies analyst Mike Prew is unimpressed, describing the transaction as a ‘coalition of weak business models’.

He says Hammerson chief executive David Atkins at a recent capital markets day noted his business was ‘sheltered from UK pressures’ thanks to 56% of its business being overseas.

Assuming the Intu deal goes through, noting that Hammerson has already secured support from half of Intu’s shareholder base, the merged business would be 75% focused on the UK.

Prew also doesn’t see the takeover as a catalyst for the wider space. ‘This is not a cash bid for a high-quality UK REIT by an overseas buyer which would trigger a re-rating of the sector.’

Proving him wrong will require Hammerson to live up to all of its historic track record of operational and financial efficiency and more. (TS)

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