The Boards of Hammerson and Intu believe that there is a compelling strategic rationale for the Acquisition, which will bring together their high-quality retail property portfolios and their combined expertise to create a leading European retail REIT with a strong income profile and superior growth prospects.
Both Boards believe that following the Acquisition, the Enlarged Group will be better placed to enhance its position in its geographic markets and across its retail formats, with a more efficient and adaptable platform allowing it to respond to fast changing consumer preferences and retail trends.
Hammerson and Intu believe that the Acquisition will:
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Create a £21 billion pan-European portfolio of high-quality retail and leisure destinations, with enhanced exposure to high-growth markets and which will benefit from evolving consumer trends;
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Unlock growth and value creation opportunities for shareholders by bringing together Hammerson's and Intu's leading assets, which have strong fundamentals, under a superior combined operating platform;
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Offer attractive growth prospects with exposure to two of Europe's fastest growing economies of Ireland and Spain and additional sources of capital to forge ahead with ambitions to expand the Premium Outlets platform;
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Provide the opportunity for significant rationalisation of the Enlarged Group's property portfolio through an anticipated disposal programme of at least £2 billion. This will both strengthen its balance sheet and provide liquidity to reinvest in higher return opportunities;
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Allow the Enlarged Group to draw on its combined consumer know-how and apply both companies' expertise in events, customer service and digital to drive footfall, delivering highly productive space for retailers and attractive destinations for consumers;
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Allow the Enlarged Group to benefit from the intu brand and Intu's online experience;
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Bring opportunities to deploy Hammerson's strong track record in delivering successful developments across an enlarged pipeline; and
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Provide opportunities to deliver synergy benefits through cost reductions and optimisation of the Enlarged Group's financing arrangements. |
The Enlarged Group will be led by David Atkins, CEO, and Timon Drakesmith, CFO, will be called “Hammerson plc”, and will harness the talent in both companies to optimise the benefits for shareholders of the Enlarged Group.
David Tyler, the Chairman of Hammerson, will be the Chairman of the Enlarged Group. John Whittaker, Deputy Chairman of Intu, will become Deputy Chairman of the Enlarged Group. John Strachan, Chairman of Intu, will join the Board of the Enlarged Group as Senior Independent Director. The Enlarged Group overall will have six directors nominated by Hammerson and four directors nominated by Intu.
Hammerson has received irrevocable undertakings or letters of intent from Intu Shareholders, including Peel and the Intu Directors, to vote in favour of the Scheme at the Court Meeting and the resolutions proposed at the Intu General Meeting in respect of 685,220,682 Intu Shares in aggregate, representing approximately 50.6 per cent. of Intu's issued share capital at close of business on 5 December 2017 (being the last Business Day prior to the date of this Announcement).
Commenting on the Acquisition, David Tyler, Chairman of Hammerson, said:
“This transaction will deliver real value for shareholders. The financial strength of the Enlarged Group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale.”
David Atkins, Chief Executive of Hammerson, said:
“This marks an exciting milestone in the history of Hammerson. Bringing together the high-quality portfolios of both companies establishes Hammerson as a larger, leading European retail REIT, enhances shareholder returns and supports opportunities for long-term growth. The acquisition creates a leading pan-European platform of desirable retail and leisure destinations which are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities. I hold Intu's high-quality centres in high regard and I look forward to working with a strengthened team to enhance the performance of our entire portfolio.”
John Strachan, Chairman of Intu and proposed Senior Independent Director of the Enlarged Group, said:
“A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders. Intu offers high-quality retail and leisure destinations in the UK and Spain, which when merged with Hammerson's own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe's leading cities. I am proud of the financial and operational success that Intu's management team has delivered and pleased to see that the intu brand will continue.”
Summary
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Under the terms of the Acquisition, Intu Shareholders will receive:
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for each Intu Share: 0.475 New Hammerson Shares (the “Exchange Ratio”)
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In arriving at the Exchange Ratio, Hammerson has taken into account a number of factors including the published net asset values of each company, the recent share price performance of the two companies, and the opportunity to combine two portfolios of high-quality retail properties with good prospects for stronger combined growth, and to deliver cost and financing synergies.
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Based on the Closing Price of 534.5 pence per Hammerson Share on 5 December 2017 (being the last Business Day before the date of this Announcement), the terms of the Acquisition represent:
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A value of approximately 253.9 pence per Intu Share, equivalent to £3.4 billion for the entire issued and to be issued share capital of Intu; |
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A premium of approximately 27.6 per cent. to the Closing Price of 199 pence per Intu Share on 5 December 2017 (being the last Business Day before the date of this Announcement); |
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A premium of approximately 19.2 per cent. to the volume weighted average price of 213 pence per Intu Share for the three month period ended on 5 December 2017 (being the last Business Day before the date of this Announcement); and |
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A premium of approximately 9.4 per cent. to the volume weighted average price of 232 pence per Intu Share for the six month period ended on 5 December 2017 (being the last Business Day before the date of this Announcement).
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The Acquisition will result in Hammerson Shareholders owning approximately 55 per cent. of the issued share capital of the Enlarged Group and Intu Shareholders owning approximately 45 per cent. of the issued share capital of the Enlarged Group (based on the fully diluted share capital of Hammerson and the fully diluted share capital of Intu). |
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