Intu and Peel progress £2.9bn takeover talks

Intu has confirmed it has received an “indicative proposal” regarding an acquisition by a consortium led by John Whittaker’s Peel, valuing the shopping centre owner at £2.91bn.

Earlier this month Peel Group, Saudi Arabia’s Olayan Group and asset manager Brookfield Property Group confirmed they were considering a cash offer to buy shopping centre owner Intu.

According to a statement by Intu to the stock market this morning, a preliminary takeover offer of 205p a share was received on 11 October, and then yesterday a second offer, which upped Intu’s value to 215p a share.

Peel Group is Intu’s largest shareholder, with a 27% stake. Olayan has 2% of Intu’s shares, and also owns 25% of Peel, having bought into the company as part of a property acquisition in 1987.

The potential acquisition comes eight years after Intu, then Capital Shopping Centres, bought Manchester’s Trafford Centre from Peel, in a £1.65bn deal which saw Peel chairman John Whittaker take a 20% stake in the company and £75m in cash. At the time, Intu shares were worth 400p each.

The Intu board has formed an independent committee made up of all directors of Intu other than John Whittaker, due to his connection to the consortium.

The potential acquisition still at a “preliminary and exploratory stage”, and the consortium will be required to confirm whether or not it is making a firm offer by 1 November. The Intu committee has agreed to allow the consortium access to due diligence materials “in order to advance discussions”.

Intu has had several near-takeovers over the last few years, the value of which has steadily decreased, from a £5bn offer from Simon Property Group in 2011, to a £3.4bn deal with Hammerson which fell through earlier this year.

Shares in Intu were up 23.6p to 201.3p this morning.