A proposed £2.8 billion takeover of Merry Hill centre owner Intu has been abandoned because of volatility in the retail sector.
A consortium of investors had been in discussions with Intu over a possible buyout of the firm which owns 17 shopping centres across the UK and three in Spain.
But in a statement to the stock exchange today, Intu announced that the consortium had withdrawn its offer and the deal would not go ahead.
The statement said: “The consortium has announced today that, given the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets, (it) is not able to proceed with an offer within a time frame which is manageable within the confines of the Code timetable.”
The consortium comprised UK-based Peel Group, Middle East investor Olayan Group and Brookfield Property Group, an asset manager headquartered in Canada.
Talks on the buyout of Intu were granted three deadline extensions during November by The Panel on Takeovers and Mergers but the latest one was due to expire at 5pm tomorrow.
Last week, it looked as though the buyout would go ahead after the consortium had almost completed its legal, tax, accounting and commercial due diligence on the deal.
Peel Group’s activities are focussed mainly on property and development in Greater Manchester and Merseyside.
The firm built and ran the Trafford Centre in Greater Manchester, which is one of the UK’s largest shopping centres, before selling it to Intu, then known as Capital Shopping Centres, in 2011 for £1.6 billion.
At that time, it was the largest property deal in British history and gave Peel a stake of 23 per cent in Capital Shopping Centres which was rebranded as Intu in 2013.
Intu has been carrying out a £100 million overhaul of the Merry Hill centre, in Dudley, including revamping the bus station and signing deals with a string of new retailers.
Intu’s statement added: “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.”
Hammerson, the property group which co-owns Bullring and Grand Central in Birmingham, has been among Intu’s previous suitors, tabling a £3.4 billion bid earlier this year but that deal also fell through.