INTU Intu Properties Plc

By Carlo Martuscelli

Shares of Intu Properties PLC (INTU.LN) rose as much as 37% in trading on Friday on news of a potential takeover of the FTSE-250-listed retail-property investor.

On Thursday evening Brookfield Property Group said it was part of a consortium, also including Peel Group and Olayan Group, that is considering a cash offer for the shopping-mall owner. Later that day, Intu said it had not yet received an approach, but it had formed a committee to consider any deal put forward.

Peel and Olayan hold shares representing around 29.9% of the share capital of Intu, while Brookfield holds no interest.

Liberum said it sees 238.7 pence a share as a realistic bid price, amounting to an off of around 3.2 billion ($4.2 billion). The brokerage based this on a recommended bid of 253.9 pence a share made by Hammerson PLC (HMSO.LN) last December while accounting for a decline in net asset value since then.

Hammerson subsequently pulled out of the bid, citing a weak U.K. retail market. The U.K.-listed property developer said a number of bankruptcies and restructuring in the sector meant there was a "heightened level of risk" that out-weighed the benefits of acquiring Intu.

Condition have been tough for U.K. retailers recently with a number seeking rescue deals with creditors and announcing job losses. Traditional retailers are facing headwinds from the structural shift to online shopping, higher costs and subdued consumer confidence.

Liberum said Intu investors should seriously consider a bid if it is put forward by the consortium. "Aside from any view on the long-term structural outlook for retail property, Intu's prospects as a standalone entity are threatened by above average financial leverage which limits its ability to self-fund growth," said the brokerage, adding that a cash bid could give shareholders the option to salvage value before a dividend cut.

Shares of Intu Properties at 0850 GMT were up 43.65 pence, or 29%, to 192.20 pence.

Maryam Cockar and Dimitrios Kontos contributed to this article.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

October 05, 2018 05:16 ET (09:16 GMT)

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