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  1. ITV Report

Metrocentre firm in multi-billion pound takeover

Shoppers at the Metrocentre. Credit: ITV Tyne Tees

The company behind the Metrocentre and Eldon Square Shopping Centre is set to be taken over in a multi-billion pound deal.

Shopping centre owner Hammerson, which owns Monument Mall in Newcastle, has agreed the all share takeover of rival Intu, which operates the north east venues.

The deal represents a value of approximately 253.9p per Intu share, equivalent to £3.4bn.

The combined group will be led by Hammerson boss David Atkins and chaired by David Tyler.

Shareholders will vote on the deal next year and Intu have already secured 50 per cent of investor support for it.

Mr Tyler said: "This transaction will deliver real value for shareholders.

"The financial strength of the enlarged group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale."

The groups plan to slash costs, offload at least £2bn-worth of assets. It has not given specific details about where these will be.

They also plan to target "high growth" market, including Spain and Ireland.

Intu also operates the Trafford Centre in Manchester while Hammerson owns Birmingham's Bullring, Bicester Village in Oxfordshire and Brent Cross shopping centre in north London.

John Strachan, chairman of Intu, said: "A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that we believe will benefit all our stakeholders.

"Intu offers high-quality retail and leisure destinations in the UK and Spain, which when merged with Hammerson's own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe's leading cities."

The acquisition will result in Hammerson shareholders owning 55 per cent of the combined firm and Intu investors the remainder.

The deal comes at a time when consumer confidence has declined, resulting in a sharp drop in retail sales, but shopping centres in city locations have tended to fare better than high streets during economic downturns.

Mr Atkins added: "This marks an exciting milestone in the history of Hammerson. Bringing together the high-quality portfolios of both companies establishes Hammerson as a larger, leading European retail REIT (real estate investment trust), enhances shareholder returns and supports opportunities for long-term growth.

"The acquisition creates a leading pan-European platform of desirable retail and leisure destinations which are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities."

Stephen Patterson, director of communications at NE1 Ltd, the Business Improvement District company for Newcastle City Centre, said: “It is fantastic news about the merger of Hammersons and intu and specifically about what this will mean for retail and investment here in Newcastle.

"Both companies have an outstanding pedigree for investment and development in the city with intu’s Eldon Square and Hammerson’s landmark development of Monument Mall. We’re excited to see their plans for the future. Both are at the top of their game and at NE1 we look forward to working with them and supporting them with future development plans.”