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It’s all go in UK property this morning with blue-chip Hammerson agreeing to a £3.4bn all-share purchase (27% premium) of listed INTU Properties, creating a £21bn pan-European portfolio of high-quality retail and leisure destinations. HMSO shares have understandably fallen, given the acquisition risk involved, and although the deal is being pad for with new shares (0.475 new shares for each INTU shareholder) it doesn’t look dilutive. Shares in INTU Properties have also understandably jumped (+20.6% at their best), but not straight to the 254p offer price due to the same acquisition risk (the deal may collapse/be blocked), the time value until completion and potential regulatory hurdles.
The M&A news has helped peer British Land rise, although reactions for both Segro and Land Securities are rather more muted, the latter perhaps dented by a Credit Suisse sector review that has seen it downgraded, whilst Derwent London and Great Portland were upgraded. Adding to the M&A theme supporting the sector this morning, Shaftesbury (SHB) has launched a £265m fund raising for its own property acquisitions, placing 10% of new shares, although its shares are lower on account of the 4.9% discount to yesterday’s close (equal to latest NAV) but still dilutive.
And all this positivity despite a still difficult Brexit backdrop, evidently not hurting corporate confidence that much. A vote of confidence om the UK Consumer?# Mike van Dulken, Head of Research, 6 Dec 2017
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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