20th Mar 2014 08:39
LONDON (Alliance News) - Shopping centre investors Intu Properties PLC Wednesday said it will buy two more centres and take a 50% stake in a third for GBP867.8 million, a deal it will fund through GBP423.8 million in new debt facilities and a rights issue.
In a statement, Intu said it will buy all of the Westfield Derby shopping centre as well the Sprucefield retail park in Northern Ireland from Westfield. It will also buy a 50% stake in the Westfield Merry Hill shopping centre near Birmingham from Westfield, going into partnership with QIC which owns the other half of the business.
Its fully underwritten rights issue to part fund the deal will offer two new shares for every seven existing shares at 180 pence, or ZAR32.28, a share. It hopes to raise gross proceeds of GBP500 million, or about GBP488 million net of costs.
Merry Hill is located 10 miles west of Birmingham and has 1.4 million square feet over two retail levels with 214 shop units and a further 0.3 million square feet of other adjacent retail space. It attracts around 25 million customer visits annually.
The Derby centre is an enclosed town centre shopping centre comprising 1.3 million square feet of space with over 180 shop units over two levels and a 12 screen cinema. It attracts around 25 million customer visits annually.
Sprucefield is a retail park in Northern Ireland originally developed in 2003, comprising five retail units and has a total floor area of 230,000 square feet.
In a statement, Intu Chief Executive David Fischel said the deal marked a rare opportunity to acquire what he described as prime shopping centres. In particular, the location of Merry Hill means it has filled a gap in its UK coverage map, he said.
The company said it has opportunities to grow rental values and generate capital value growth over the medium-term at Merry Hill, to grow capital through yield compression at the Derby centre, and to develop further retail space over the longer-term at Sprucefield.
It expects the acquisitions to add to its earnings per share in 2014.
Intu Properties shares were down 4.2% at 309.5 pence early Thursday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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