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Possible takeover of Intu is withdrawn

Intu Properties updates on possible takeover

Possible takeover of Intu is withdrawn- Intu Properties (INTU) has announced that the consortium of Peel Group, the Olayan Group and Brookfield Property Group have decided that given the current macroeconomic conditions and the potential near term volatility across markets the offer has been withdrawn. Intu’s shares have dropped by 40% over the course of today. We have written a previous article talking about this potential take over which you can read about here.

Intu states: “In order to facilitate its capital investment programme, intu will continue to manage its loan-to-value ratio and financial headroom, which could involve further disposals, part disposals and other corporate initiatives in due course. In the last four years, intu has recycled capital for investment in flagship assets through disposals and part disposals of over £1 billion of smaller centres.
However, given the heightened macroeconomic uncertainty and the reduced pool of potential buyers at present for UK shopping centres, asset disposals are expected to be challenging to deliver in the next few months. intu therefore intends to substantially reduce the payment of dividends in the short term, starting with the 2018 final dividend, which per intu’s normal financial calendar would be payable in June 2019, to provide additional funds to continue intu’s investment programme.  The current annual dividend of 14.0 pence per share amounts to approximately £188 million per annum. The sum retained from any reduction in dividend will be available net of any applicable corporation tax for intu’s investment programme and general corporate purposes. The decision on the amount of the final dividend for 2018 will be taken by the Board not later than the date of the preliminary announcement of the 2018 results in early 2019.”

Summary

“intu’s focus is on delivering strong total shareholder return over the medium term and believes that maintaining cash in the business by reducing the dividend to fund the investment programme will be highly beneficial to the total returns intu can achieve. Following the withdrawal of the possible offer, intu intends to re-engage with major shareholders, including Peel, and also complete the appointment of a successor to the current Chief Executive where the search is ongoing.”

INTU- Possible takeover of Intu is withdrawn

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