Hammerson to dispose of £1.5bn stake in Bicester Village owner
Hammerson has agreed to sell its interest in Bicester Village owner Value Retail to Silver Bidco, a special purpose vehicle established by affiliates of investment firm L Catterton, for an enterprise value of £1.5bn.
The REIT said the transaction will generate cash proceeds of around £600m which are intended to be deployed in line with its stated capital allocation framework, namely to further strengthen its balance sheet, invest in growth and value creation, and enhance distributions to shareholders.
Of the proceeds, around £95m will allocated to reduce the group’s net debt, circa £350m will be put aside for reinvestment, and up to £140m will be returned to investors as part of a share buy-back.
In the UK and Europe, Value Retail operates nine Villages outside of Barcelona, Brussels, Dublin, Frankfurt, London, Paris, Madrid, Milan, and Munich.
Rita-Rose Gagné, CEO of Hammerson, said: “This is a transformational deal for Hammerson, generating cash proceeds of c.£600m whilst removing an overweight, low yielding and minority stake, and positioning us for accelerated growth and value creation.
“The disposal focuses our portfolio on prime urban real estate with a transformed capital structure and the capacity and capability to advance our strategy in higher yielding opportunities with stronger returns, whilst enhancing returns to shareholders.
“I’m excited about the opportunity this gives us to build on our momentum and track record of the last three years. We are at a point in the cycle where I can now be on the front foot to capture the exceptional value creation opportunities I see in the near, medium and long term. This is exactly what this transaction will deliver.”
Earlier this year, Hammerson agreed to a £111m sale of Union Square shopping centre in Aberdeen, concluding a £500m non-core disposal programme.