A £2.9bn takeover bid for the shopping centre group Intu has been abandoned amid Brexit-related concerns.
A bidding consortium made up of the Intu shareholder Peel Group, Saudi Arabia’s Olayan Group and Canadian firm Brookfield Property had tabled a 210.4p per share offer. The consortium, however, said it was not able to go ahead with an offer within the timetable allowed under the regulator Takeover Panel’s rules.
David Fischel, the chief executive of Intu, said: “There is only one reason this deal was called off and that was Brexit … In the last couple of weeks for Brookfield, as an outsider looking in, how can they make a real decision about investing in the UK right now and weigh up the risks?”
The Intu deal is the third retail property takeover to collapse this year after the Bullring owner Hammerson abandoned a bid for Intu in April, a few days after the French shopping centre firm Klépierre aborted a takeover of Hammerson.
Expert Opinion“The retail outlets-based shopping sector has had its challenges this year with the combined onslaught of online trading and Brexit uncertainty.
“The latest victim seems to have been Intu, the owner of shopping centres, from which a consortium of investors has just walked away from a bid.
“It seems that ‘good progress’ had been made in discussions between the parties as well as on the completion of due diligence. However, in the end the consortium had decided to walk away, according to Intu, because of the “uncertainty around current macroeconomic conditions and the potential near-term volatility across markets”, which had meant that the consortium could not manage to proceed with an offer within the Takeover Code timetable.
“The decision not to proceed with an offer was announced on 29th November, following on from the views from the Bank of England, warning of dire consequences of a ‘no deal’ Brexit - and the two events have unsurprisingly been linked in the media.
“This is the second time in a year that a potential bidder has decided not to proceed with a takeover offer for Intu and obviously adds to the nervousness within the retail sector.
“For lawyers, takeover bids, corporate voluntary arrangements, the impact of Brexit on cross-border deals the desire of tenants to mitigate long–term leasehold liabilities and many other associated phenomena are providing plenty of opportunities for head-scratching and innovative thinking – although contrary to popular belief, few benefit in an adverse economic environment.”
David Glass - Consultant
Irwin Mitchell recently published its latest UK Powerhouse report which examined the challenges and opportunities for the economy following the UK’s exit from the EU. The report can be downloaded from here.