Intu Properties PLC (LON:INTU) has confirmed it is considering a 215p per share preliminary takeover offer from a consortium formed by its deputy chairman John Whittaker and Saudi Arabian and Canadian investors.
The FTSE 250-listed retail property developer said the consortium formed by UK billionaire Whittaker’s Peel Group, Saudi Arabia’s Olayan and Canadian property investor Brookfield Asset Management has been granted access to company documents to conduct due diligence with a view to making a firm offer.
READ: Intu Properties back in play as deputy chairman John Whittaker mulls bid
The consortium initially offered 205p per Intu share on October 11, which was raised to 215p six days later, Intu said.
The company added that the consideration will be reduced by any dividends or other distributions declared, payable or paid prior to completion.
Intu said it intends to issue a trading update for the period from 1 July 2018 as soon as practicable, which will include the outcome of an updated independent valuation of the company's investment and development properties as at 30 September 2018.
The offer comes in the wake of Intu’s CEO stepping down in July as it swung to a loss and warned of lower growth in rental income.
READ: Shopping centre owner Hammerson to buy rival Intu Properties in all-share deal
It also follows an aborted £3.5bn takeover bid from UK peer Hammerson PLC (LON:HMSO) which was pulled back in April with the predator blaming pressure from shareholders and a tough UK retail market.
Hammerson's recommended all share offer had valued Intu shares at 253.9p each.
In early morning trading on Friday, Intu shares jumped 14% higher to 203p.
A “friendly hostile” ending seems likely”, says Liberum
However, in a note to clients, analysts at Liberum Capital said they struggle to see how the Intu Board will be able to recommend a cash offer below 239p.
They added; “Management has repeatedly maintained that its prime retail assets are resilient and trading well with negligible impact from wider occupier weakness.
“Intu’s previously recommended bid from Hammerson was predicated on the upside shareholders could still realise as part of an all-share combination.
“In the absence of a bid, however, Intu's shareholders could potentially face dilution before its equity risk premium can reduce. A “friendly hostile” ending seems likely.”
Liberum repeated a ‘sell’ rating and 145p price target on Intu shares.