PARIS — Mergers continue to serve as a key defense mechanism for mall operators struggling to cope with shifting consumption habits, with French realtor Klépierre swooping in to bid for U.K.-based rival Hammerson plc the latest example.
The offer, which was made public Monday and would scupper the British mall operator’s plans to buy Intu Properties, was swiftly rejected, the companies said.
“The proposal from Klépierre is wholly inadequate and entirely opportunistic,” said David Tyler, chairman of Hammerson, which owns the Brent Cross shopping center in London. The French realtor’s March 8 offer of 615 pence a share values the potential deal at around 4.9 billion pounds, or $6.88 billion at current exchange.
“It is a calculated attempt to exploit the disconnect between our recent share price performance and the inherent value of our unique and irreplaceable portfolio, which is delivering record results,” Tyler continued, in an e-mailed statement.
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Klépierre said it made the proposal on a “nonadversarial basis to the board of Hammerson with the intention of engaging in a constructive dialogue” about a possible acquisition of the company, but that the proposal was rejected “in less than 24 hours.” It has a deadline of April 16 to announce its intention to make an offer or not, or apply for an extension of the deadline.
“The Hammerson board sees absolutely no merit in Klépierre’s proposal and has unanimously rejected it. The board strongly advises shareholders to take no action,” Tyler added.
The latest development follows a $24.7 billion deal struck at the end of last year by Paris-based Unibail-Rodamco to buy Sydney-based Westfield Corp., building a $72.2 billion giant in terms of gross market value. The combined companies have a presence in 27 countries, suggesting mall owners are seeking survival through scale as people turn to the convenience of online purchases and spend less time at shopping centers.
Hammerson had agreed to acquire fellow British company Intu Properties, which would create a 21 billion pound pan-European portfolio of retail and leisure destinations.
The news Monday sent shares in Hammerson up 24 percent to 542 pence in afternoon trading, while Klépierre shares were down 3.9 percent to 33.40 euros a share.
Klépierre operates malls in 16 countries and counts U.S. based Simon Property Group as its largest shareholder, with a 20.3 percent stake.