British shopping center investment company Hammerson Plc today struck a deal to buy its smaller rival Intu Properties in an all share deal valuing the proposed acquisition at about £3.4 billion ($4.56 billion).
The offer represents a value of 253.9 pence per Intu share, a 27 per cent premium to Intu's yesterday closing price.
Under the terms of the deal, Intu shareholders will receive 0.475 new Hammerson shares for each Intu share.
Hammerson said it had already received irrevocable undertakings from Intu shareholders representing 50.6 per cent of shares.
Post closing, Hammerson shareholders would own about 55 per cent of the combined company, with Intu shareholders owning the rest.
Hammerson said it expects pretax synergies to reach a run-rate of about £25 million per annum by the end of the second year, and a one-off integration cost of about £40 million.
London-based Hammerson manages and develops retail outlets in Europe. Its portfolio, valued at £10.5 billion, includes investments in 23 prime shopping centres in the UK, Ireland and France, 17 convenient retail parks in the UK and 20 premium outlets across Europe.
The combination will create a £21 billion pan-European portfolio of retail and leisure outlets, with enhanced exposure to high-growth markets.
Intu, also based in London, owns and manages 20 shopping centres across the UK and Spain.
As of 31 December 2016, the company's investment properties were valued at £10 billion.
"The acquisition creates a leading pan-European platform of desirable retail and leisure destinations which are better positioned to serve the needs of our retailers, excite our customers and support our partners and communities,'' said, David Atkins, CEO of Hammerson.