Hammerson, which owns the Victoria Gate development in Leeds, has rebuffed a sweetened £5.04bn takeover offer from Klepierre, saying the French firm’s advances failed to reflect the value of the shopping centre giant.
The Birmingham Bullring owner knocked back the revised cash-and-shares bid of 635p –comprising 50 per cent cash and 50 per cent in new Klepierre shares – but said the board was willing to discuss an offer that met its valuation.
It comes after the group revealed last week that it would halt efforts to finalise a £3.4bn tie-up with Intu as it awaited clarity on an approach from European suitor Klepierre.
Hammerson branded Klepierre’s initial 615p cash-and-shares bid worth £4.88bn “wholly inadequate” and “entirely opportunistic”.
It said the offer price on Wednesday did not justify further talks at this price, but the French rival still has until April 16 to table a formal offer.
David Tyler, Hammerson chairman, said: “The board has considered the revised proposal from Klepierre carefully.
“At 635p, it is only a 3 per cent increase on the previous proposal and continues very significantly to undervalue the company.”
The upped proposal was outlined during crunch talks between Mr Tyler and Klepierre chairman Jean-Marc Jestin on Monday.
Hammerson would prefer to press ahead with an all-share takeover of rival Intu, which would create Britain’s biggest property company with £21bn worth of assets across Europe.
Intu operates the Trafford Centre in Manchester, while Hammerson owns the Bicester Village and Brent Cross shopping centres.
The Victoria Gate development in Leeds has been credited with transforming the city’s reputation as a retail destination.
Hammerson announced at the beginning of April that severe weather and subdued consumer confidence were weighing on UK retail sales, which were down 2 per cent in the first quarter.
However, it said that its shopping centres outperformed the market, with Bicester Village delivering a double-digit increase in the period.
The group also flagged a £3.5m hit to net rental income from the wave of retail restructurings and administrations that have afflicted the sector, including Toys R Us and New Look.
Earlier this month, David Atkins, Hammerson’s chief executive, said: “Whilst we recognise the difficult trading environment and challenges felt by many retail and restaurant formats in the UK, there continues to be good demand for space across our centres.”
Commenting on the trading update, analyst David Brockton at Liberum said earlier this month: “Hammerson’s first quarter confirms a relatively steady start to the year, although the impact of CVAs has weighed on rental income.
“Leasing activity remained positive, 6 per cent ahead of prior passing rents, and 3 per cent above ERV, led by Ireland.”
Mr Brockton said footfall at Hammerson centres remained resilient.
But he added: “Prospects for UK retail remain challenged as evidenced by retail sales performance falling 2.0 per cent in the quarter.”