Hammerson shareholder ‘to vote against intu bid’

Dutch Pension fund APG has said it will vote against Hammerson’s £3.4bn takeover of UK rival intu. APG is one of the company’s top three shareholders, with a 7.2% stake. The pension fund wrote to chief executive David Atkins and chairman David Tyler saying it had “substantial concerns” over the deal, notably around the retail environment and the amount of leverage the deal would result in. Hammerson’s proposed takeover of intu was back in the spotlight on Friday after Klépierre withdrew its offer for Hammerson. The French retail giant had made a revised bid of 635p a share which was rejected. Under Rule 2.8 of the City Code on takeovers and mergers, it is not allowed to make another bid for six months. Hammerson said on Friday that “the board continues to believe Klépierre’s proposal, which the board carefully considered following a meeting between David Tyler and Jean-Marc Jestin, very significantly undervalued Hammerson.” After this, APG issued its letter. Technically, now the Klépierre deal has been withdrawn, Hammerson can continue with its proposed merger with intu. Paperwork for the proposed tie-up – should it still it still happen – have not yet gone out, but a vote on the merger would follow shortly afterwards. However, The Sunday Times reported the board of Hammerson is expected to meet this week amid growing investor unrest over the proposed tie-up. According to the report, Hammerson could decide to renegotiate or even abandon the £3.4bn merger with intu. Bloomberg has also reported unnamed shareholders also expressing concern. The deal has faced questions since it was revealed in December because intu is heavily indebted and its assets are widely regarded as lower in quality than those of Hammerson, which include Birmingham’s Bullring. Analysts at Peel Hunt have expressed their concern surrounding Hammerson’s proposed takeover. In a note it highlights that the proposed combination would increase exposure to UK shopping centres, which it says is “an arguably challenged and overvalued asset class”. The move would also reduce its exposure to premium outlets in Ireland and France. However, Hammerson chairman David Tyler has remained adamant on the decision. He said: “The board is confident in the intrinsic value of Hammerson and its prospects. It is entirely focused on delivering value for shareholders in the shorter and longer term.” Other shareholders have, however, been reported to be more supportive of the merger, which could provide up to £25m in synergies. Hammerson’s share price is 7% down since last Thursday. Hammerson merger deal with intu on knife edge To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette