Intu considers buyout deal

Intu is reportedly exploring a buyout deal following a challenging trading period across its portfolio.

According to The Sunday Times, private equity firm Orion Capital Managers is a frontrunner, with owner Aref Lahham understood to be in the early stages of seeking partners.

Orion Capital currently holds 9.2 per cent of shares in the shopping centre group, which operates Manchester’s Trafford Centre and Intu Lakeside in Essex, amongst others.

In order to launch a successful takeover bid, Orion Capital would need to work with other Intu shareholders like John Whittaker’s Peel Holdings - which has a 27.3 per cent stake - and the Saudi Arabian Olayan Group - which has a stake in Peel.

Last year, Peel Holdings and Olayan Group attempted to make the firm private, but failed after lenders pulled out.

If a buyout was completed this time, it would help Intu avoid breaching covenants on over £1 billion in debt.

The news follows Intu reporting falling net rental income in its recent half-year results, mainly due to retailer administrations and Company Voluntary Agreements. In July it expected like-for-like net rental income, which fell 7.7 per cent to £205.2 million in the six month period ending 30 June, to be at a similar level for the rest of the year.

Intu called the first six months of 2019 “a challenging” period, with property revaluation deficits widening to £872.1 million, compared to the £650.4 million deficit recorded during the same period last year.

The value of Intu’s shopping centre portfolio fell 8.8 per cent year-on-year to £8.36 billion, while footfall only rose 0.4 per cent in its UK shopping centres.

The company declined to comment on the buyout reports.

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