A £2.9 bn (€3.26 bn) bid to acquire UK shopping centre specialist Intu has been withdrawn after the Brookfield, Olayan and Peel Group consortium cited 'uncertainty around current macroeconomic conditions and the potential near-term volatility across markets'.
Intu responded with a statement saying that 'whilst market sentiment towards retail and retail property remains negative, it is is confident of its commercial prospects which are underpinned by market leadership in UK regional shopping centres, clear focus on the highest quality assets and resilient operational performance in a challenging market'.
Cash offer
The consortium, comprising UK-headquartered Peel Group, Canada's Brookfield and Saudi Olayan, unveiled a preliminary cash offer for the London-listed group at 215p a share last month but stalled on making a firm offer. Peel and Olayan already own almost 30% of the firm.
Intu recently shifted the deadline for the takeover bid for a second time after the consortium requested an extension. It initially had until 1 November to make a firm offer, but this was later extended to 22 November. Subsequently Intu moved the deadline to 5pm on 30 November 'to enable continued discussions and provide the consortium sufficient time to complete the financing process'.
But a series of further disputes on the high street, as well as Brexit concerns, have recently darkened the outlook for Intu.
Clashes
Its recent clashes with new House of Fraser owner – Sports Direct’s Mike Ashley – resulted in a decision to close all four House of Fraser stores in Intu centres after failing to agree much lower rent terms. After that, Ashley reportedly decided to shut all 15 of his shop spaces leased from the troubled landlord. As well as the House of Fraser stores in Nottingham, Norwich, Essex and Gateshead, this also includes Sports Direct, Flannels, USC and Evans Cycles stores across the country.
Intu added: 'However, given the heightened macroeconomic uncertainty and the reduced pool of potential buyers at present for UK shopping centres, asset disposals are expected to be challenging to deliver in the next few months. Intu therefore intends to substantially reduce the payment of dividends in the short term, starting with the 2018 final dividend, which per Intu’s normal financial calendar would be payable in June 2019, to provide additional funds to continue Intu’s investment programme.
'The decision on the amount of the final dividend for 2018 will be taken by the board not later than the date of the preliminary announcement of the 2018 results in early 2019.'
Earlier this year Intu’s larger rival Hammerson ditched its offer of 253.9 pence per share for Intu after shareholders demanded a U-turn on the bid.
