Shopping centre owner Hammerson, which owns the Victoria Gate development in Leeds, has said it will not finalise its £3.4bn tie-up with Intu until it receives clarity on a takeover approach from French rival Klepierre.
The shopping centre giant said in a trading statement that while Klepierre's position "remains unclear", the board does not intend to finalise shareholder documents in relation to the proposed acquisition of Intu.
Hammerson has branded Klepierre's £4.9bn cash-and-shares offer "wholly inadequate" and "entirely opportunistic", but the French firm has until April 16 to "put up or shut up" with a formal offer.
Hammerson said it 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.
Hammerson also shed some light on first-quarter trading, pointing to a combination of severe weather and subdued consumer confidence weighing on UK retail sales, which were down 2 per cent.
However, Hammerson said that its shopping centres outperformed the market.
Footfall at Hammerson's UK centres rose 0.5 per cent over the quarter and were up 5 per cent over the Easter weekend.
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.
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."
The value of Hammerson's assets rose 0.3 per cent to over £10.5bn and the firm said it would offload £500m worth of properties over the year.