Klepierre abandons pursuit of Hammerson after bids are rejected

[LONDON] Klepierre SA abandoned its pursuit of Hammerson Plc after failing to clinch a deal that would have created one of the largest retail-property owners in Europe.

The French landlord had made two verbal bids for Hammerson, both of which were rejected by the UK mall owner. The second offer valued the company at about £5 billion (S$9.35 billion).

"The board of Hammerson did not provide any meaningful engagement with respect to the increased proposal and, after careful consideration, Klepierre has concluded that it does not intend to make an offer for Hammerson," the company said in a statement Friday.

Klepierre's decision paves the way for Hammerson to pursue its own acquisition of rival Intu Properties Plc, which has been delayed by the bid for Hammerson.

Klepierre had been seeking to exploit weakness in Hammerson's share price caused by fears over online rivals, consumer spending in the wake of the Brexit vote and investors' reaction of the UK mall owners' pursuit of Intu. Hammerson's management rebuffed Klepierre's offers as opportunistic, saying they undervalued the company and reflected a discount to its net asset value.

Shopping-mall owners are combining as they try to cut costs and focus on premium properties, making them more attractive to retailers that are opening fewer stores as Internet sales rise. Brookfield Property is seeking to buy GGP Inc in the US and Unibail-Rodamco SE is trying to take over Australia's Westfield Corp. Hammerson put the Intu deal on hold until Klepierre clarified its position.

BLOOMBERG