Intu is to buy out Westfield’s interests in a trio of shopping centres for £867.8m by launching a £500m rights issue.
The deal includes a 50% stake in Westfield Merry Hill , the whole of Westfield Derby and the whole of Westfield’s Sprucefield retail park.
As well as the rights issue – which effectively creates two new shares for every seven existing at a price of 180p – Intu will use £423.8m of new debt facilities to finance the deal.
The deal sees Intu significantly bulk up its offer across the Midlands; the 1.4m sq ft Merry Hill is 10 miles west of Birmingham, while Derby boasts 1.3m sq ft and more than 180 shops.
Both centres each attract around 25m customers a year.
Sprucefield was originally developed in 2003 and comprises five shops with a total floor area of 230,000 sq ft. Merry Hill accounts for £407.7m of the total deal price; Derby £390.3m and Sprucefield £69.8m.
The assets command a combined rent roll of £54.9m.
Merry Hill is jointly owned with QIC, which will retain its 50% stake, while Intu will take over from Westfield as asset and development manager.
The centre will be re-branded as Intu Merryhill.
Intu chief executive David Fischel said the deal was a rare opportunity to pursue the company’s strategy of focusing on the UK’s biggest and most successful shopping centres.
“The acquisition strengthens Intu’s position as the leading owner, developer and manager of prime UK shopping centres filling in gaps in our national coverage and extending the footprint of our nationwide consumer facing brand and digital strategy,” he said.
“We are delighted to establish a partnership with QIC, a major global investor, at Merry Hill.”
jack.sidders@estatesgazette.com
