Hammerson Scraps Bid For Shopping Mall Group Intu

British retail property giant Hammerson on Wednesday scrapped a planned takeover of rival Intu that would have created a pan-European shopping mall giant, citing a weak UK consumer market.

London, (APP - UrduPoint / Pakistan Point News - 18th Apr, 2018 ) :British retail property giant Hammerson on Wednesday scrapped a planned takeover of rival Intu that would have created a pan-European shopping mall giant, citing a weak UK consumer market.

Intu expressed its disappointment, saying it "regards as unsatisfactory the explanations given" by Hammerson. The announcement comes less than one week after French rival Klepierre gave up on trying to buy Hammerson after two rejected informal bids.

Explaining its decision to pull out of the Intu deal, Hammerson said in a statement on Wednesday: "Over the last five months, the financial strength of retailers and other tenants in the UK has softened...

while consumer confidence has also remained subdued." It said that "the proposed Intu acquisition is no longer in the best interests of Hammerson shareholders", adding that the board would formally advise them not to back the deal.

Hammerson had in December announced an agreement to buy Intu for �3.4 billion ($4.85 billion, 3.93 billion Euros) -- a deal aimed at diversifying Hammerson's portfolio and creating a �21-billion retail and leisure conglomerate, while maintaining the Intu brand.

Investors appeared to welcome Hammerson's decision, with the group's share price jumping 1.9 percent in trading. Intu meanwhile slumped 5.2 percent. Hammerson's U-turn comes amid difficulties for retailers housing large floor space who are competing also for fast-growing online sales.

A study published last week by audit group PricewaterhouseCoopers showed that the number of new store openings in Britain sank to its lowest level in seven years in 2017. Meanwhile on Wednesday, chief market analyst at CMC Markets UK, Michael Hewson, described Hammerson's decision as "quite a sensible move".

He added in a client note: "Why double up on retail property when stores are closing and rental income is under threat?" Hammerson counts Brent Cross shopping centre in London and the Les Terrasses du Port in Marseilles, southern France in its portfolio. Intu meanwhile owns shopping centres including the Trafford Centre in Manchester, northwest England, as well as properties in Spain.