Intu Properties CEO David Fischel. Picture: SUPPLIED
Intu Properties CEO David Fischel. Picture: SUPPLIED

A consortium led by the biggest investor in Intu Properties has scrapped a £2.9bn bid for the British shopping centres owner, the second time in less than a year a takeover of the firm has collapsed.

Intu shares fell 39.2% to R20.80 after Peel Group, which is the vehicle of Intu’s deputy chairman and major investor John Whittaker, Canadian property firm Brookfield and Saudi Arabia’s Olayan Group said macroeconomic uncertainty and potential market volatility meant they would not submit an offer.

Intu CEO David Fischel blamed mounting concern about Britain’s impending exit from the EU for the collapse of the takeover talks.

“The escalation in the news around Brexit and all the potential ramifications has obviously ramped up a lot in the last couple of weeks and has made it a very hard climate to make a big investment decision,” he said.

Intu also said in response to the consortium’s withdrawal that it would “substantially” cut its dividend this year to conserve cash to invest in the business, dealing a further blow to shareholders in the company behind sites such as Manchester's Trafford Centre.

The failure of the takeover leaves the shopping centres group in a “challenging position,” analysts at Liberum said in a note.

It also comes as Intu faces a leadership crossroads, with Fischel intending to leave once a successor is appointed after more than 17 years at the helm of the business.

The Liberum analysts said that cutting shareholder payouts was “sensible” and added: “This could be an opportunity for a new CEO, but grasping this nettle would likely crystalise further short-term pain in addition to the risk of continued market weakness.”

The consortium’s u-turn comes after rival shopping centres group Hammerson abandoned a £3.4bn deal to buy Intu in April amid investor concerns a takeover would increase Hammerson’s exposure to Britain’s troubled retail sector.

Landlords have been under pressure this year from the rise of online retailing and waning consumer sentiment caused by Brexit, which have hit shopping at bricks-and-mortar stores.

Brexit-related uncertainty has surged in recent weeks, compounding the situation just as Whittaker’s consortium was considering a takeover.

Reuters