Shares plummet at shopping centre owner after £2.9bn deal collapses
The share price of shopping centre owner intu has plummeted by over 40% yesterday after news that its £2.9bn deal had been called off.
intu owns the Trafford Centre and Manchester’s Arndale Centre and had been in talks with a consortium over the potential deal.
The consortium was being led by Manchester firm Peel Properties.
Trading in intu’s share closed last night at just 114.5p – down 40.55% over the day from its closing price on Wednesday of 192.6p on the back of a buying consortium made up of Peel Properties, Saudi Arabia’s Olayan Group and Canadian property investor Brookfield Asset Management pulling out of the deal to create the UK’s largest property firm.
Two offers were made, the most recent worth £2.9bn, and three extensions to the deadline for a firm offer were sanctioned.
But the decision was made to pull the plug because of the uncertain economic situation.
Russ Mould, AJ Bell investment director, said: “A second failed bid for INTU and a third failed takeover approach in the Real Estate Investment Trust sector this year (following Klepierre’s aborted lunge for Hammerson) is weighing heavily on commercial property stocks, especially as intu is also flagging a substantial dividend cut for 2018.
“Those REITs with the greatest exposure to retail are bearing the brunt of investors’ disappointment, with Hammerson and Land Securities down the most, as shareholders begin to despair of whether there will ever be a catalyst that closes up the substantial discounts to net asset value at which these property plays trade.
“It will be interesting to see if the intu cut prompts investors to pause for thought when it comes to the FTSE 100’s fattest-yielding stocks, even if they all operate in different industries.”
