Shares in shopping centre owners Intu plunged after would-be investors pulled a £2.8 billion takeover bid.
Intu Properties, which owns 17 shopping malls in the UK, including the Arndale Centre in Manchester and Gateshead’s Metrocentre, blamed Brexit uncertainty and a volatile high street market.
Intu said market conditions meant the consortium of bidders – led by John Whittaker’s Peel Group – could not continue with its proposed offer within the timeframe set out by City takeover rules.
Intu said the decision was due to “the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets”.
It is the second failed takeover attempt for Intu after Hammerson abandoned a £3.4 billion approach in April.
It comes despite a number of extensions to the takeover timetable, since the consortium comprising Peel Group, Olayan and Brookfield Property tabled a £2.8 billion offer in October.
Peel already has a 27.3% stake in Intu.
Mr Whittaker, chairman of the Peel Group, said: “We remain fully committed to Intu Properties as a long-term strategic shareholder, as demonstrated by our participation in the consortium’s possible offer.”
Intu said it plans to continue investing long term in its shopping centres, but will lower investor dividend payouts in the short term given the reduced pool of potential buyers and “challenging” asset-disposal potential.
It added the board will re-engage with major shareholders, including Peel, and complete the search for a successor to its chief executive.
Intu said: “Whilst market sentiment towards retail and retail property remains negative, Intu is confident of its commercial prospects which are underpinned by market leadership in UK regional shopping centres, clear focus on the highest quality assets and resilient operational performance in a challenging market.”
It warned that recent high-profile retail collapses, such as House of Fraser, have hit its full-year rental income by about 1.5%, leaving expected like-for-like growth at between 0% and 1%.
It forecasts like-for-like rental income growth to remain between 0% and 1% in 2019.
Mike Ashley of Sports Direct – who bought House of Fraser out of administration – has said he will close four of the department stores in Intu malls amid a dispute over rent.
Intu has already recently warned the value of its shopping centres has fallen amid difficult retail conditions.
The group said in October its net asset value fell 3% in the third quarter, reflecting “negative investor sentiment towards UK retail property”.
Intu’s portfolio was valued at £9.58 billion on September 30.