KLPEF Klepierre SA (PK)

By Matthew Dalton 

PARIS -- France's Klépierre, a holding of U.S. mall king David Simon, said Monday it made an unsolicited GBP4.88 billion ($6.8 billion) bid for U.K. property firm Hammerson PLC, the latest sign of consolidation in a sector under threat from Amazon.com Inc.

Hammerson said it had quickly rejected the approach, which was made March 8. Hammerson Chairman David Tyler called the bid, which represents a 40.7% premium to the company's closing share price Friday, "wholly inadequate and entirely opportunistic."

Commercial landlords across Europe and the U.S. have been grappling with the threat to brick-and-mortar retail from Amazon and other online shopping services. Those fears helped push Hammerson's shares down sharply over the last eight months.

So far, profits at Hammerson, the U.K.'s biggest shopping-center landlord, have yet to take a hit, even as its shares have slumped. Hammerson is in the midst of closing its own acquisition, having reached a multibillion-dollar deal in December to buy rival U.K. property firm Intu Properties.

Klépierre's bid "is a calculated attempt to exploit the disconnect between our recent share price performance and the inherent value of our unique and irreplaceable portfolio which is delivering record results," Mr. Tyler said.

Klépierre said it would make a further announcement "if and when appropriate" and didn't respond to a request for comment on its next steps.

Shares in Hammerson were up 24% in afternoon trading, while Klépierre was down almost 4%.

Mr. Simon, head of Indianapolis-based Simon Property Group Inc., took a 29.4% stake in Klépierre in the depths of the eurozone's debt crisis. Two years later, the company bought Dutch property owner Corio NV.

The deal follows a series of big consolidation moves on both sides of the Atlantic as commercial landlords brace for mounting competition from online retailers. Until recently, mall and shopping-center operators in smaller, less-desirable markets have borne the brunt of the impact. But now stock prices of operators in big city, upscale locations are also coming under pressure.

In December, Klépierre rival Unibail-Rodamco SE agreed to pay $15.7 billion for Westfield Corp., which operates marquee malls from California to New York, including one at the World Trade Center. Fearing the threat from online retailers, Westfield has been reducing its retail exposure for years, venturing into residential and entertainment properties.

Another giant U.S. mall owner, GGP Inc., received a $14.8 billion bid last month from real-estate company Brookfield Property Partners LP for the roughly two-thirds of the company it doesn't already own.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

March 19, 2018 09:35 ET (13:35 GMT)

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