Investors snapped up Intu on Monday after the shopping centres owner said it is in talks with a Hong Kong property giant, as well as its largest shareholder, to join a £1 billion fundraising.
The cash-strapped Lakeside mall owner, which has been battered by retailers closing shops or getting rent cuts through restructures, is looking at a major equity raise to help pay down its near-£4.7 billion debt pile.
Shares in Intu, which have plunged nearly 90% in the past year, today leapt 2.28p, or more than 16%, to 15.68p after it said it is “engaged in constructive discussions” with existing and new investors about the cash call.
It named Hong Kong-listed Link Real Estate Investment Trust as one of the new potential investors. That would mark the Asian retail and office investor’s UK debut, and it is believed if a deal progresses then Link, chaired by ex-PwC partner Nicholas Allen, would become a significant shareholder.
Intu added that property tycoon John Whittaker’s Peel Group, which is the firm’s largest shareholder with a 27% stake, is also involved in the discussions.
The company said there “can be no certainty that the equity raise will be implemented nor as to the terms on which any such implementation might occur”, but it plans to update the City at the end of the month when it publishes full-year results.
The potential fundraising is the latest effort to help boost Intu following a turbulent few years.
Matthew Roberts replaced long-standing boss David Fischel last year and had to cope with a wave of retailers, such as Topshop parent Arcadia, closing shops or getting rent discounts using a Company Voluntary Arrangement restructure model.
In 2018 larger rival Hammerson ditched a £3.4 billion swoop for the business, while a consortium comprising Peel Group, Olayan and Canada’s Brookfield walked away from £2.9 billion takeover talks.
Intu is hoping paying down debts will encourage investors back to the business. It is also selling some of its Spanish malls to trim debts and will look to sell stakes in some UK sites where it is sole owner.
The company last month pointed out it had a busy Christmas trading period, better than the market.
