European property giant Klepierre has revealed that it has had a £5billion takeover bid for UK shopping centre operator Hammerson rejected.
The French property firm, which has 150 shopping centres in 57 cities worldwide, made a proposed 615p per share bid for the Birmingham Bullring owner on March 8, but it was turned down in less than one day.
The cash-and-shares approach represented a 40.7 per cent premium on Hammerson’s closing share price on Friday of 437.1p per share.
Hammerson’s share price has rocketed more than 26 per cent in morning trading following the news.
Turned down: European shopping centre giant Klepierre has revealed that it has had a £5bn takeover bid for UK mall operator Hammerson, which owns the Birmingham Bullring, rejected
In a statement to the London Stock Exchange, Klepierre said there was no guarantee that a firm offer would be made.
Any intention to do so must be tabled by 5pm on April 16.
The Paris-based firm said that it made the proposal to the Hammerson board on a ‘non-adversarial basis’ with the intention of starting ‘a constructive dialogue’ regarding a possible offer.
It added that a further announcement would be made ‘if and when appropriate’.
The move comes after Hammerson agreed an all-share acquisition of rival Intu in December last year worth £3.4million, which would create Britain’s biggest property company with a £21bn portfolio of retail developments throughout Europe.
The deal would result in Hammerson shareholders owning 55 per cent of the combined firm and Intu investors the remainder, with the combined group being led by Hammerson chief executive David Atkins and chief financial officer Timon Drakesmith.
Hammerson’s chairman David Tyler would be chairman of the new group and deputy chairman John Whittaker deputy chairman.
Northern hub: Intu operates the Trafford Centre in Manchester, while Hammerson owns Bicester Village and Brent Cross shopping centre
Intu operates the Trafford Centre in Manchester, while Hammerson owns Bicester Village and Brent Cross shopping centre.
The move comes at a tough time for Hammerson, which has been relegated to the FTSE 250 Index after seeing its share price slide in response to market concerns about retailers’ high street performance.
The tough trading conditions facing retailers have intensified in recent months, with surging inflation and paltry wage growth prompting consumers to tighten their belts.
Retail giant: Hammerson, which also owns 37 UK shopping centres and retail parks across the UK, Ireland and France including Brent Cross in north London
Hammerson, which also owns 37 UK shopping centres and retail parks across the UK, Ireland and France including Brent Cross in north London, Cabot Circus in Bristol, Victoria Gate in Leeds and Westquay in Southampton, last month announced a 6.9 per cent rise in net rental income for the year to December 31 to £370.4m, up from £346.5m a year earlier.
Intu operates a chain of centres including Lakeside shopping centre in Essex and Trafford Centre in Manchester and has co-ownership of St David’s in Cardiff.