Published: Tue, March 20, 2018
Finance | By Jaime Brady

Hammerson says Klepierre offer 'significantly undervalues' company

Hammerson says Klepierre offer 'significantly undervalues' company

Klepierre, which has shopping centers in 16 countries, said it offered 615 pence per share, a premium of about 40.7 percent to Hammerson's closing price last Friday. Shares in Klepierre were down 3.5 percent.

The shopping centre owner, best known for its part-ownership of the Bullring in Birmingham, said the approach was "unsolicited", "wholly inadequate", "entirely opportunistic in its timing" and "significantly undervalued Hammerson", which has a net asset value - a key benchmark - of 776p a share.

Matthew Saperia, analyst at Peel Hunt, said: "Despite the board rejection [of the Kléppiere offer], Hammerson is now in play and the likelihood of its proposed merger with Intu Properties proceeding has decreased considerably".

Shopping centres face fierce competition from online shopping giants such as Amazon, driving consolidation in the sector.

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In a statement, the French firm said that on the 8 March it made a proposal "on a non-adversarial basis" to the Hammerson board with the intention of kicking off "a constructive dialogue" regarding a possible offer. Hammerson is in the midst of closing its own acquisition, having reached a multibillion-dollar deal in December to buy rival United Kingdom property firm Intu Properties. Shares in Intu Properties were flat at 204.00p. It is easy to see why the market isn't supporting the Hammerson merger with Intu'.

The decline in Klepierre's share price indicated some unease among investors in the company which specializes in European markets and whose largest shareholder is US -based Simon Property Group (SPG.N).

The Times reported the interest of Klepierre in Hammerson could threaten the all-share deal to merge with Intu announced in December.

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