Intu shares plunge as Peel consortium pulls offer
By Frank Prenesti
Date: Thursday 29 Nov 2018
(Sharecast News) - Shares in shopping centre owner Intu Properties plunged more than 35% on Thursday after Brexit uncertainties forced a consortium led by its deputy chairman John Whittaker to pull its £2.9bn takeover offer.
"Given the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets, the consortium is not able to proceed with an offer within a timeframe which is manageable," Intu said in a statement.
The consortium includes Peel Group, Saudi Arabia's Olayan Group and Canadian property investor Brookfield Property Group.
Intu said in order to facilitate its capital investment programme, it would continue to manage its loan-to-value ratio and financial headroom, which could involve "further disposals, part disposals and other corporate initiatives in due course".
"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 current annual dividend of 14p a share amounts to approximately £188m a year.
Analysts at Liberum said the consortium's decision to walk away left Intu "in a challenging position with its highly valued shopping centres facing cyclical and structural pressure, above average financial leverage, a departing CEO, and two recently failed bid processes which will have inevitably been disruptive to the business".
Kempen, meanwhile, said the withdrawal of the offer "has some stark implications for the company and sector in our view".
With this deal and the takeover from Hammerson failing in April, "it begs the question of who the potential suitor for this business could now be"..
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