Wrap Text
Withdrawal of recommendation in respect of Intu Properties plc (“Intu”)
Hammerson plc
(Incorporated in England and Wales)
(Company number 360632)
LSE share code: HMSO JSE share code: HMN
ISIN: GB0004065016
(“Hammerson” or “the Company”)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
This Announcement contains inside information
18 April 2018
Hammerson plc (“Hammerson” or the “Company”)
Withdrawal of recommendation in respect of Intu Properties plc (“Intu”)
On 6 December 2017, the Board of Hammerson announced an all-share offer for Intu (the “Intu Acquisition”).
The Hammerson Board firmly believed in the strategic rationale of combining Intu’s portfolio with
Hammerson’s, under the leadership of the Hammerson management team, and the opportunity it provided
for value creation in the medium to long term. Notwithstanding this, for the reasons explained below, the
Board has now concluded that the proposed Intu Acquisition is no longer in the best interests of shareholders.
The Board therefore today announces it is withdrawing its recommendation to Hammerson shareholders to
vote in favour of the Intu Acquisition.
Reasons for withdrawal of recommendation
Despite the resilience of Hammerson’s portfolio and strong operating metrics in Q1 2018, the equity market’s
perception of the broader UK retail property market has deteriorated since the start of the year. This has led
to a disconnect between the Company’s share price and the fundamental value of its business and prospects.
This perception has been intensified by market concerns over the extended period of time that it would take
to complete the transaction and realise longer-term returns from the Intu Acquisition.
The Board of Hammerson reassessed the proposed acquisition of Intu in light of updated information on
current market dynamics in the UK. Over the last five months, the financial strength of retailers and other
tenants in the UK has softened and a number of retailers have entered into administrations or CVAs, while
consumer confidence has also remained subdued. Whilst Hammerson has proven its portfolio is well
positioned to weather the current environment, the equity market now perceives a heightened level of risk
associated with the UK retail property sector as a whole. It is also apparent from extensive engagement with
shareholders, in particular in recent weeks, that there is a wide range of views on the merits of the Intu
Acquisition. As a result, the Board of Hammerson has concluded that the heightened risks associated with
the Intu Acquisition outweigh the long-term rewards that can be expected in comparison to other strategic
options open to the Company. The Board has therefore now concluded that the proposed Intu Acquisition is
no longer in the best interests of Hammerson shareholders. The Board recognises and thanks Intu for its
commitment during the past months.
The Board has notified Intu of the withdrawal of its recommendation that shareholders vote in favour of the
Intu Acquisition. Under the conditions of Hammerson’s offer and the terms of the Co-operation Agreement
between Hammerson and Intu, the withdrawal of the recommendation alone will not cause a lapse of
Hammerson's offer or terminate the Co-operation Agreement. Unless Intu and the Panel on Takeovers and
Mergers agree otherwise, Hammerson must convene a Hammerson shareholder meeting to consider the
Intu Acquisition. Hammerson's offer will lapse if its shareholders do not approve the acquisition at such
shareholder meeting.
Hammerson’s attractive standalone business
The Board of Hammerson is committed to maximising value for shareholders in the shorter and longer term
and has the highest confidence in Hammerson’s prospects as a standalone business.
Since the announcement of the Intu Acquisition, Hammerson’s financial and operating performance has been
strong and the Company continues to pursue a disciplined approach to asset disposals at attractive
valuations.
Hammerson’s strategy of creating best-in-class retail destinations has been a major contributor to its success
in delivering strong and consistent financial returns. The Company has deliberately focused on assets in
growing cities with strong consumer catchments, including high-quality shopping centres, convenient retail
parks and premium outlets.
Hammerson has an exceptional standalone track record of financial delivery, generating high single-digit
growth over the last five years in earnings (CAGR: +8.3%), dividends (CAGR: +7.6%) and EPRA NAV per
share (CAGR: +7.4%) since 2012 (when Hammerson became solely focused on retail). Hammerson has sold
£1.3 billion of assets in the last three years, broadly in line with book value. Previous capital allocation
initiatives have delivered high returns including the Company’s investment in Premium Outlets which have
generated an IRR of 28% since 2011 and its exceptional development pipeline which included Les Terrasses
du Port, Marseille, with an IRR of 14% since 2009.
The Board believes that Hammerson’s unique and irreplaceable portfolio, the opportunities it has for value
creation and the management team’s proven track record of financial delivery is not reflected in the current
share price. The Board is therefore reviewing options to accelerate the delivery of value for shareholders and
actions which include:
- Reassessing the optimal portfolio mix through appropriate disposals
- Seeking opportunities to invest further into higher-growth segments such as Premium Outlets and
Ireland
- An updated evaluation of the risk-adjusted potential returns from the Company’s capital projects
- Pursuing capital returns to shareholders, as appropriate, and in line with Hammerson’s strong credit
metrics
- Targeting the most efficient cost and operating structure while maximising customer and retailer
experience
More detail on these actions will be provided to shareholders in the coming months.
David Tyler, Chairman of Hammerson, said:
“After careful consideration, the Board has concluded it is no longer in the best interests of shareholders to
carry out the Intu Acquisition.
In recent weeks, investors have told us they share our view of the exceptional quality of our portfolio and that
they have great confidence in our management team. The Board has complete conviction in Hammerson’s
prospects as a standalone business as we pursue our plans for future growth.”
David Atkins, Chief Executive of Hammerson, added:
“Hammerson is an ambitious company with a disciplined approach to the pursuit of compelling investments
to strengthen its portfolio. It is clear that the heightened risks to the Intu Acquisition now outweigh the longer-
term benefits. We have a clear strategy that has delivered consistent, strong returns on a standalone basis
and we look forward to updating the market in the near term on our plans to accelerate the delivery of further
value for shareholders.”
The person responsible for making this Announcement is Sarah Booth, General Counsel and Company
Secretary.
Enquiries:
Hammerson +44 (0)20 7887 1000
David Tyler, Chairman
David Atkins, Chief Executive Officer
Timon Drakesmith, Chief Financial Officer and Managing Director, Premium Outlets
Rebecca Patton, Head of Investor Relations
Catrin Sharp, Head of Corporate Communications
Deutsche Bank +44 (0)20 7545 8000
(Financial Adviser and Corporate Broker to Hammerson)
Charles Wilkinson
James Arculus
Rishi Bhuchar
Samantha Forbes (South Africa) +27 (0)11 775 7000
J.P. Morgan Cazenove +44 (0)20 7742 4000
(Financial Adviser and Corporate Broker to Hammerson)
Edmund Byers
Massimo Saletti
Paul Hewlett
Adam Laursen
Lazard +44 (0)20 7187 2000
(Financial Adviser to Hammerson)
William Rucker
Patrick Long
Will Lawes
Max von Hurter
FTI Consulting +44 (0)20 7979 7400
(PR adviser to Hammerson)
John Waples +44 (0)77 1781 4520
Dido Laurimore +44 (0)78 0165 4424
Tom Gough +44 (0)75 8386 3025
Further information
Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank)
and, in the United Kingdom, by the Prudential Regulation Authority. It is subject to supervision by the
European Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority, and is subject to
limited regulation in the United Kingdom by the Prudential Regulation Authority and FCA. Details about the
extent of its authorisation and regulation by the Prudential Regulation Authority, and regulation by the FCA,
are available on request or from www.db.com/en/content/eu_disclosures.htm. Deutsche Bank AG, acting
through its London branch (“DB London”) is acting as financial adviser and corporate broker to Hammerson
and no other person in connection with this Announcement or any of its contents. DB London will not be
responsible to any person other than Hammerson for providing any of the protections afforded to clients of
DB London, nor for providing any advice in relation to the acquisition or any other matter referred to herein.
Neither DB London nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a
client of DB London in connection with this Announcement, any statement contained herein or otherwise.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove,
is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation
Authority in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to
Hammerson and no one else in connection with the matters set out in this Announcement and will not regard
any other person as its client in relation to the matters set out in this Announcement and will not be
responsible to anyone other than Hammerson for providing the protections afforded to clients of J.P. Morgan
Cazenove or its affiliates, or for providing advice in relation to the contents of this Announcement or any other
matter referred to herein.
Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting
exclusively as financial adviser to Hammerson and no one else in connection with the acquisition and will not
be responsible to anyone other than Hammerson for providing the protections afforded to clients of Lazard &
Co., Limited nor for providing advice in relation to the acquisition or any other matters referred to in this
Announcement. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Lazard & Co., Limited in connection with this Announcement, any
statement contained herein or otherwise.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom
and South Africa may be restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom and South Africa should inform themselves about, and observe,
any applicable requirements. The information disclosed in this Announcement may not be the same as that
which would have been disclosed if this Announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
Forward-looking statements
This Announcement contains certain forward-looking statements, beliefs or opinions, with respect to the
financial condition, results of operations and business of Hammerson. These forward-looking statements can
be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements
often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”,
“aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other words of similar meaning. These
statements are based on assumptions and assessments made by Hammerson, in light of their experience
and their perception of historical trends, current conditions, future developments and other factors they
believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they
relate to events and depend on circumstances that will occur in the future and the factors described in the
context of such forward-looking statements in this document could cause actual results and developments to
differ materially from those expressed in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking statements are reasonable, no assurance
can be given that such expectations will prove to have been correct and you are therefore cautioned not to
place undue reliance on these forward-looking statements which speak only as at the date of this
Announcement. Hammerson does not assume any obligation to update or correct the information contained
in this section of the website (whether as a result of new information, future events or otherwise), except as
required by applicable law.
There are several factors which could cause actual results to differ materially from those expressed or implied
in forward-looking statements. Among the factors that could cause actual results to differ materially from
those described in the forward-looking statements are changes in global, political, economic, business,
competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future
business combinations or dispositions.
Publication of this Announcement
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be available on Hammerson's
website at www.hammerson.com/investors by no later than 12 noon (London time) on the business day
following this Announcement).
Hammerson has its primary listing on the London Stock Exchange and a secondary inward listing on the
Johannesburg Stock Exchange.
Joint Sponsors:
Deutsche Securities (SA) Proprietary Limited
Java Capital
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