L CATTERTON, the private equity firm backed by French luxury fashion house LVMH Moet Hennessy Louis Vuitton, has agreed to buy Hammerson Plc’s stake in outlet mall landlord Value Retail in a deal representing an enterprise value of £1.5 billion (S$2.6 billion).
The transaction includes interests in nine luxury retail properties outside major European cities, including the Bicester shopping village, about 97 kilometres north-west of London, according to a statement on Monday (Jul 22). It will generate cash proceeds of £600 million for Hammerson, which has been on a multiyear drive to sell assets and cut debt as it grapples with plunging retail property rents and values.
While Value Retail’s prized outlet malls that lure millions of international shoppers have been among properties most resilient to the rise of online shopping, Hammerson has long sought an exit of its minority stake in part because of its lack of control over the company.
“The disposal focuses our portfolio on prime urban real estate with a transformed capital structure and the capacity and capability to advance our strategy in higher-yielding opportunities with stronger returns, while enhancing returns to shareholders,” Hammerson chief executive officer Rita-Rose Gagne said.
In addition to the sale of the stake, Hammerson’s other proposals include:
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A share consolidation that involves 10 ordinary shares being consolidated into one ordinary share of 50 pence apiece
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Each such consolidated ordinary share will then immediately be subdivided and redesignated into one new ordinary share of 5 pence apiece and nine deferred shares of 5 pence each
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Enhanced distributions through a share buyback of as much as £140 million and a higher dividend payout ratio of about 80-85 per cent of adjusted earnings. BLOOMBERG
