intu confirms takeover bid tabled valuing business at around £2.85bn

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intu, owners of Victoria Centre and Broadmarsh centres in Nottingham, this morning confirmed that the Peel Group, the Olayan Group and Brookfield had tabled a take-private bid at 210.4p per share and valuing the company at around £2.85bn.

In a statement intu said: “On 4 October 2018 a consortium comprising the Peel Group, the Olayan Group and Brookfield Property Group (together the “Consortium”) announced that they were in the preliminary stages of considering a possible cash offer for the Company.

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“intu confirms that on 11 October 2018 it received an indicative proposal from the consortium of 205p per share in cash, subject to an adjustment for dividends as set out below.

“The independent committee formed by intu (comprising all directors of intu other than John Whittaker, who is connected to the consortium) and its financial advisers met to consider the Indicative Proposal. Following further engagement, on 17 October 2018 intu received a revised indicative proposal from the Consortium of 215p per share in cash, subject to an adjustment for dividends.”

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The terms of both proposals will be reduced by any dividends or other distributions declared, payable or paid by intu prior to completion including the interim dividend of 4.6p per share due to be paid on 20 November 2018. Therefore the revised consideration would be 210.4p per share.

intu’s share price has lifted 12.89% to 200.60p per share on the news this morning giving it a market capitalisation of around £2..49bn. It closed at 177.77p last night. The bid represents a circa 20% premium to that price.

The figure is significantly beneath the the circa 253.9p per share offer Hammerson had accepted last December. Hammerson aborted the bid in part due to market deterioration.

Both proposals also included a number of other pre-conditions.

intu said: “In order to advance discussions regarding the possible announcement of a firm offer, the Independent Committee has resolved to grant the Consortium access to certain due diligence materials. A further announcement will be made when appropriate.”

It will issue a trading update for the period from 1 July 2018.

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This announcement, intu said, has not been made with the consent of the consortium, which now under takeover rules has until 5pm on 1 November 2018, to make an offer or withdraw.

Peel Holdings owns 27.2% of the company’s shares and is its largest shareholder while the Olayan Group holds about 3.5%. Canada’s Brookfield does not hold a stake but does bring significant financial and real estate clout and does favour retail having recently completed the acquisition of GGP, the second largest mall owner in the US, for $15bn.

The tabled bid is at a price significantly beneath that offered by Hammerson earlier this year as well as where analysts have been expecting it to need to be to gain intu Board approval.