Dutch pension fund APG Asset Management has warned that it will vote against Hammerson’s planned acquisition of its smaller UK rival Intu Properties at its upcoming shareholder meeting.
In a public letter APG said it had ‘substantial concerns’ about Hammerson’s all-share offer for Intu, saying it was ‘insufficiently attractive’ for Hammerson shareholders. ‘Furthermore, we believe that the proposed acquisition will significantly dilute Hammerson’s high-quality portfolio,’ the company said.
APG holds a 7% stake in Hammerson, making it the company’s second-largest shareholder, according to Thomson Reuters Eikon data.
APG sent the letter to Hammerson’s chairman David Tyler and CEO David Atkins last Friday in response to French REIT Klépierre’s announcement earlier on the day that it had abandoned its takeover bid for Hammerson. The French company said that there had been a lack of ‘any meaningful engagement’ from Hammerson’s board after it raised its proposal for Hammerson to 635 pence a share earlier in the week. APG is the second-largest shareholder in Klépierre after US-based Simon Property Group with a 12% stake.
In the letter, APG reiterated that Hammerson's offer for Intu did not take sufficient account of the additional risks involved given the state of the UK retail environment, the increased financial leverage that would be required and execution risks associated with implementation of the deal.
These concerns were voiced in two previous letters to the Hammerson board on 14 and 20 March respectively.
On Friday Hammerson’s share price initially fell 13% but ended the day 9% lower at 473 pence. The company's portfolio of shopping centres includes London’s Brent Cross and Birmingham’s Bullring.
See also Klépierre abandons Hammerson bid
Image: The Bullring in Birmingham