Business
Disposal of Hammerson’s interest in Value Retail
Disposal of Hammerson’s interest in Value Retail.
About this update from Hammerson Plc
[{"type":"text","content":"\n\nNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION\n \nFOR IMMEDIATE RELEASE\n \nTHIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION\n \n22 July 2024\n \nHammerson plc\n(\"Hammerson\" or the \"Group\" or the \"Company\")\n \nISIN: GB0004065016\nLSE share code: HMSO / JSE share code: HMN\n \nDisposal of Hammerson's interest in Value Retail\n\nHammerson is pleased to announce that it has entered into a binding agreement for the disposal of its entire interest in Value Retail (the \"Value Retail Group Interests\") to Silver Bidco Limited (\"Bidco\"), a newly-formed company incorporated in Jersey and established by certain affiliates of L Catterton (\"L Catterton\"), for an enterprise value of £1.5bn1, generating cash proceeds of c.£600m (the \"Disposal\")[1].\n \nHighlights\n· Disposal of Hammerson's overweight, non-controlling and yield-dilutive interest in Value Retail for c.£600m of cash proceeds will:\no ensure a clean exit from a complex structure at an attractive price, representing an EBITDA multiple of 24x[2];\no unlock value from 42% of Hammerson's total portfolio[3], retiring a historical five-year average cash yield of c.2%[4]; and\no represent an exit cash yield of c.3.4%[5], a 24% discount to GAV of £2.0bn[6], and crystallising a 10-year IRR of 13%.\n· Hammerson intends to use the Disposal proceeds for a combination of:\no significant and immediate deleveraging through a reduction in net debt, with pro forma LTV of 23% and net debt: EBITDA of 5.1x;\no reinvestment into assets in its core markets at higher yields and stronger returns, with a priority on JV consolidation and repurposing asset enhancement initiatives; and\no a return of capital to shareholders via a share buy back of up to £140m, representing c. 10% of Hammerson's market capitalisation[7] prior to the date of this announcement.\n· The Board of Hammerson (the \"Board\") also today announces the intention, following the successful completion of the Disposal, to adopt an enhanced payout ratio policy for ordinary dividends of c.8...