Hammerson board on borrowed time, Jefferies analysts say

Hammerson’s board is likely to be ousted after turning down a bid approach and scrapping their own takeover of Intu, Jefferies analysts said on Thursday as they upgraded the FTSE 100 shopping centre operator to ‘hold’.

On 18 April Hammerson said it would no longer recommend its £3.2bn takeover of rival Intu to shareholders, effectively scrapping the deal. It announced the decision three days after Klepierre withdrew its £5.04bn indicative offer to buy Hammerson, which rejected two approaches from the French company.

Having withdrawn its increased 635p a share proposal, Klepierre is barred from bidding for Hammerson for six months but could return, by which time Hammerson may be under new management. Jefferies calculated that buying Hammerson could add to Klepierre’s earnings at a price of up to 750p a share.

The Jefferies analysts said: “We have upgraded HMSO [Hammerson] to ‘hold’ as, having jilted Intu at the altar, the HMSO board’s position is now untenable and facing a Martin Sorrell day of reckoning.”

While upgrading Hammerson from ‘underperform’ the analysts increased their price target to 540p from 400p. They cut their price target for Intu to 155p from 175p and maintained their ‘underperform’ rating.