PRETORIA - Hammerson, the FTSE 100 UK retail real estate investment trust with a secondary listing on the JSE, has expressed confidence in getting both shareholder and regulatory approval for its planned acquisition of listed rival intu properties.
If approved, the planned transaction would create a £21billion (R338bn) pan-European portfolio of high-quality retail and leisure destinations.
David Atkins, the chief executive of Hammerson, said yesterday that both intu properties and Hammerson had published their financial results and they were now in a position to seek shareholder approval. “We anticipate publishing our shareholder documentation in the coming weeks, with the extraordinary general meeting scheduled for April.
“If shareholder approval is obtained, the only remaining condition will be competition regulatory approval. Following the receipt of that approval, the transaction is anticipated to complete in the fourth quarter of this year,” he said.
Transaction
Timon Drakesmith, the chief financial officer of Hammerson, said at least 50percent of Hammerson shareholders and 75percent of intu properties shareholders would have to vote in favour of the transaction for it to proceed.
But Drakesmith said they announced in December that they had more than 50percent support from intu properties shareholders, which support remained intact, and have had positive meetings with about 70percent of Hammerson’s shareholders. “We will publish documentation to support the shareholder vote in three weeks' time,” he said.
Hammerson’s portfolio includes 10 of the UK’s top 50 shopping centres while intu properties owns nine of the top 20 super regional centres in the UK.
Drakesmith said they have had some good engagement with the Competition and Markets Authority (CMA) since the proposed transaction was announced and had already started to provide it with information.
He said Hammerson had learnt a lot about the way the CMA segmented the “consu-
mer journey and the different hierarchy of shopping centres, supermarkets, high street retail and online” from a CMA investigation into its acquisition of a Birmingham shopping centre about two years ago.
Drakesmith said they were using the same group of advisers and the combined knowledge of their and intu properties’ advisers on the way the regulators looked at market concentration issues.
“That supports our view that we will get clearance for this transaction towards the end of the third quarter, perhaps the fourth quarter of 2018,” he said.
Combined portfolio
Drakesmith said at least 10 percent of the combined portfolio did not suit their return objectives and they would be looking to dispose of more than £2bn worth of properties over the next two or three years. This would be used to deleverage the combined business while also investing in intu’s Spanish business, investing in its premier outlet business and doing big developments.
Drakesmith said Hammerson alone had sold about £1.2bn in property assets in the past three years at only a 2percent discount to book value in what was regarded as a fragile investment market, and believed disposing of £2bn of properties in a similar period was deliverable. “We are looking to get on with the £2bn-plus of disposals by targeting £500m in 2018 on the Hammerson side and have already sold more than £90m in the first six weeks,” he said.
Hammerson yesterday reported a 7percent growth in net rental income to £370.4m in the year to December.
Shares in Hammerson closed 1.06percent lower on the JSE yesterday at R76.52.