intu slumps after it's jilted a second time

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intu slumps after it's jilted a second time

Published Date: 2018-11-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

intu slumps after it's jilted a second time

A consortium of investors withdrew due to "the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets".

intu properties' shares collapsed yesterday after a second proposed takeover of the group this year was abandoned due to weak fundamentals for UK retail property. Its stock sank as much as 41.5%, taking losses for the year to 52%.

Last month, a consortium including the Peel Group, Saudi conglomerate The Olayan Group and Canary Wharf owner Brookfield Property Group, proposed an indicative offer of 215 pence per share to buy out minority shareholders and take intu private. The offer included a 4.6p dividend, which has since been paid. However, following a number of extensions to allow the consortium time to conduct a due diligence investigation, it said it couldn't proceed with an offer for now due to "the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets".

In April, Hammerson scrapped a £3.4 billion takeover of intu, saying the opportunities it saw for value creation last December had since diminished. The UK property group withdrew its recommendation that shareholders vote in favour of the deal.

The company said a trading update last month illustrated how it had continued to deliver a resilient operational performance through a period that was particularly challenging for UK retailers.

While it has had revise growth for the year downwards due to tenant failures, in particular House of Fraser and Coast, it said the four House of Fraser stores closing at its centres provided just 1% of its annual rent roll. While this would impact rental income and reduce vacancy costs next year, it said it provided the opportunity to re-engineer and repurpose these stores. It expects like-for-like net rental income growth of 0% to 1% next year, excluding the House of Fraser stores which are now redevelopment projects.

intu said the current negative sentiment towards UK retail property had reduced its net assure value per share by around 9% in the first nine months of the year to 344p.

Following the withdrawal of the consortium's possible offer, it said it intended to re-engage with major shareholders, including the Peel Group, while continuing its search for a new CEO to replace David Fischel, who is stepping down.

Its shares retraced some of their losses to close 39% lower at R20.80.





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