April 5, 2018 / 6:52 AM / in 3 months

Hammerson has not heard from Klepierre since rejecting bid

(Reuters) - Britain’s Hammerson Plc (HMSO.L) said on Thursday it had not heard from Klepierre (LOIM.PA) since it rejected a 4.9 billion pound ($6.88 billion) bid from the French operator of shopping centers.

Hammerson said it did not intend to finalize shareholder documents related to its proposed acquisition of Intu Properties (INTUP.L), as it awaits clarity on the bid from Klepierre.

Hammerson, however, said on a conference call that it remains convinced there is a “clear, strategic rationale” in combining with Intu.

The U.K. shopping center owner rejected a 615-pence-per-share bid from Klepierre in March, about three months after it set out to buy smaller rival Intu.

“We have not heard back from them (Klepierre), nothing really to engage with, but they certainly know where we are,” Chief Executive David Atkins said.

Hammerson said the so-called put up or shut up (PUSU) deadline for Klépierre is April 16. Klepierre declined to comment.

Brokerage Exane BNP Paribas said the inclusion of a March valuation is “explicitly for the purposes of the company’s bid defense”.

“By producing a Q1 valuation, Hammerson is clearly trying to force Klepierre into improving on its initial approach at 615 pence,” Exane analysts said in a note. The company said its portfolio valuation was 10.6 billion pounds at March 31, up 0.3 percent from Dec. 31.

Britain’s retail sector faces restrained consumer spending amid Brexit uncertainty.

Shopping center operators are also grappling with competition from online retailers such as Amazon, a rivalry that is driving consolidation across the commercial property sector.

Hammerson’s combination with Intu in a deal worth 3.4 billion pounds would form a group that will also have sites in Ireland, France and Spain.

On the other hand, Klepierre owns more than 100 shopping centers across 16 countries but does not have any sites in the UK and Ireland, a gap that a takeover of Hammerson would resolve.

“Whilst we recognize the difficult trading environment and challenges felt by many retail and restaurant formats in the UK, there continues to be good demand for space across our centers,” Hammerson said.

The company said it had signed leases totaling 7 million pounds in the first three months of 2018, up 59 percent from a year earlier.

Shares in Hammerson were up 1.4 percent, Intu shares were down 0.4 percent and Klepierre was up 0.4 percent.

Reporting by Radhika Rukmangadhan in Bengaluru; editing by Sunil Nair and Jason Neely

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