The value of Intu has dropped from £2.8bn in November 2018 to a low of £164m today, as the Trafford Centre operator confirmed investment talks with Link Real Estate Investment Trust had fallen through.
On Monday, Intu issued a statement “responding to press speculation”, confirming it was in discussions with Hong Kong-based Link, alongside existing shareholder Peel Group, to back a £1bn fundraising drive.
Intu, which also co-owns the Manchester Arndale with M&G Real Estate, is understood to be looking for between £1bn and £3bn, with an equity raise to be launched at Intu’s AGM later this month.
However, the talks quickly stalled, as Intu released a follow-up statement yesterday: “Link Real Estate Investment Trust has informed Intu of its intention to no longer participate in a recapitalisation of the company.
“Intu remains engaged with shareholders and potential new investors in relation to a proposed equity raise.”
Intu’s 2018 financial results saw a £1.1bn loss, and the value of its portfolio written down from £10.5bn to £9.2bn. The company’s debt stands at £4.7bn.
John Whittaker’s Peel Group, which developed the Trafford Centre before selling the scheme to Intu in 2010, has a 27% stake in Intu. The stake would once have been valued at billions of pounds, and now equates to around £44m.
The Intu share price dropped to 11p yesterday following the news, and crept up to 12.5p this morning. Five years ago, the value of an Intu share stood at 376p.
Today, Intu has a market value of £164m. At the time of a takeover bid by a Peel-led consortium in 2018 which never went ahead, Peel offered 210p per share, valuing the group at £2.8bn.