Brookfield Property Group has sweetened an offer for UK shopping malls-owner Intu Properties to value the company at £2.9bn (€3.3bn), as it targets an industry that has been shunned by investors because of online retail's rise.
The bid consortium, that also includes billionaire John Whittaker's Peel Group and Saudi Arabia's Olayan Group, made a revised proposal to pay 215p per Intu share, less any dividends. That's about 44pc more than Intu's share price before news of a potential takeover emerged. The bidders already own almost 30pc of Intu.
Hammerson, which owns the Dundrum Town Centre and Swords Pavilions shopping centres, scrapped a £3.4bn bid for Intu earlier this year.
Mall owners have been the subject of a flurry of deal- making in the past year as the growth of online sales cut the value of their assets. The latest move is another sign of Brookfield's enduring faith in bricks-and-mortar stores, following its $15bn acquisition of US landlord GGP earlier this year.
Intu shares gained as much as 15pc in London, the most since October 5. A day earlier, Brookfield and the other bidders said they were working on an offer. The shares traded at 200.10p at 9.10am in London.
In a statement confirming the level of the offer, Intu said it would give the venture access to its books to undertake due diligence. The 215p offer, tabled a week after an initial 205p approach, would be worth 210.4p a share after revisions for proposed dividends. Intu plans to carry out a new valuation of its portfolio which could result in the bid being cut. The venture has until November 1 to make a firm offer. If the bid succeeds, the new owners could help the debt-laden company to strengthen its balance sheet and modernise its malls.
That would combat the threat of online stores and sluggish consumer spending, which has forced several UK retailers to close stores or file for bankruptcy. Intu owns 17 centres in the UK, including Lakeside in Essex and Manchester's Trafford Centre, and three in Spain.