Hammerson, which owns Birmingham’s Bullring, has made an offer to acquire shopping centre giant Intu, owner of Manchester’s Trafford Centre.
British property development and investment company Hammerson made the takeover bid to establish itself as a “larger leading European real estate investment trust (REIT) to enhance shareholder returns and allow for long-term growth”, according to CEO David Atkins.
The deal would result in the creation of Britain’s largest property company, worth £21bn. The new business would invest in “only the best shopping centres”, following the existing trends of both companies, to provide the best offering to retailers.
The retail sector has seen some uncertainty in recent years, with retail employment falling by 62,000 last year as online shopping puts more pressure on the high street. Lower spending powers across the general population have also led to lower than average spending figures, and higher inflation rates since the decision to leave the EU have also had an effect on consumer spending.
Last month, however, Intu revealed figures showing that footfall in its shopping centres had improved, and the 96% occupancy rate of its shops across all of its centres had remained stable.
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.”
Hammerson shareholders will receive a 55% stake in the company, and Intu shareholder will get the remaining 45%.