Hammerson bats away second takeover offer from Klépierre worth £5bn

Shoppings centres giant Hammerson on Wednesday said “non merci” to a sweetened £5 billion takeover approach from French rival Klépierre.

The FTSE 250 landlord behind the Brent Cross and Birmingham’s Bull Ring malls has rejected a half cash, half shares offer worth 635p per share. Hammerson believes “it is not at a price that justifies further engagement” with the suitor.

The update comes three weeks after the British firm revealed it had received — and swiftly rejected — a shock 615p-per-share bid.

Hammerson chairman David Tyler met Klépierre’s boss Jean-Marc Jestin on Monday to discuss the deal which could potentially derail Hammerson’s own £3.4 billion takeover plan for smaller competitor Intu.

The conversations took place at a central London flat used by one of Hammerson’s advisers, Lazard, sources said.

Tyler today said the board had considered the latest proposal carefully and it “continues very significantly to undervalue the company”. However, the property firm “remains open” to further discussions.

Shares in Hammerson — which, in addition to Lazard, is being represented by Deutsche Bank and JPMorgan — fell 7.4p to 517.6p. Intu rose 5.2p to 209.4p.

Klépierre, which owns more than 100 shopping centres, wants to gain a foothold in the UK and Ireland through the acquisition. But Hammerson would rather press on with its all-share takeover of Lakeside owner, Intu, which would create a mega-retail landlord with increased strength to compete with the rise of online shopping.

Hammerson, which counts retailers such as John Lewis and Fenwick as tenants, last week admitted it has put the Intu deal on hold “while Klépierre’s position remains unclear”.

Hammerson and Intu have attempted to impress the Square Mile over the last week, with both issuing updates praising strong Easter trading.

The former acknowledged that the retail market is tough in the UK, with first-quarter sales hit by bad weather and weaker consumer confidence. But it stressed there is good occupier demand for space in Hammerson’s buildings, and said its assets are now worth around 790p per share.

The City today expressed surprise at the offer. Analysts polled by the Standard this week had predicted bids of 650p to 700p per share would be needed to tempt Hammerson shareholders.

Exane BNP’s Vishal Lakhani said the latest approach “comes in at such an underwhelming level” and Hammerson is unlikely to recommend an offer below 700p.

He added: “There will now be questions surrounding Klépierre’s willingness to reach close to that level, given… negative sentiment surrounding UK shopping centres.”

Colm Lauder of Goodbody said he expected a more “ambitious” bid. “The marginal increase may imply Klépierre has got cold feet on the deal.”

Klépierre, advised by Goldman Sachs and Citi, has until Monday 16 April to make a firm offer.