An investment group has withdrawn its £2.85 billion takeover bid for the parent company of Nottingham’s Victoria and Broadmarsh shopping centres.
The consortium led by Peel Group abandoned the planned buy-out of Intu on Thursday morning (November 29), blaming market conditions and uncertainty.
It is the second time in a year a deal has fallen through, after shopping centre giant Hammerson backed out of a £3.4 billion bid in April.
Intu owns a chain of shopping centres around the UK including the Manchester Arndale and Trafford Centres.
In a statement Peel Group said it would not be completing the deal “given the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets”.
Peel was leading a consortium which also included Olayan Group and Brookfield Property Group to buy Intu.
Peel is chaired by property mogul John Whittaker, who is also deputy chairman non-executive director at Intu.
Whittaker said Peel Group will remain an Intu shareholder despite the collapse.
He said: “We remain fully committed to Intu Properties as a long-term, strategic shareholder, as demonstrated by our participation in the consortium’s possible offer.
“Intu’s portfolio of super regional and prime city centre shopping centres is trading strongly and benefiting from the retailer store rationalisation process that is currently under way in the UK.
“Physical retail continues to play a key role in all successful multi-channel retailer sales strategies and Intu’s national portfolio of centres enjoys some of the highest customer footfall in the country.”
The collapse comes during a difficult period for Intu in Nottingham. Earlier this month the Victoria Centre was dealt a blow by the news House of Fraser will close its store in the centre in the new year.
Intu’s long-running plan to redevelop the Broadmarsh shopping centre is already delayed.
The company has planning permission from Nottingham City Council for the £89 million overhaul. But this is already two years behind its initial timetable, which would have seen the redeveloped centre open this year. Intu later said the work should be complete by 2020.
Preparatory work has been done at the Broadmarsh by Intu, but major structural work for the redevelopment has not started.
Meanwhile, Nottingham City Council is progressing with the Broadmarsh Car Park redevelopment across the road on Collin Street, which will include shops and a new Central Library.
While they will connect and complement each other, the projects are separated by the fact the car park site is owned by Nottingham City Council, and the shopping centre is majority-owned by Intu.
In its own statement announcing the collapse of the deal, Intu said: “Whilst market sentiment towards retail and retail property remains negative, intu is confident of its commercial prospects which are underpinned by market leadership in UK regional shopping centres, clear focus on the highest quality assets and resilient operational performance in a challenging market, as evidenced in this announcement and the previous trading update issued on 23 October 2018.”