Shopping centre landlord Intu Properties (INTU) dips 1% to 199.5p as a third quarter update sees its net asset value trimmed.
The owner of the Trafford Centre sees its net asset value (NAV) dip 5% from the half year stage to 344p reflecting higher levels of a debt and a 3% fall in property values.
Its EPRA NAV, which strips out the impact of hedges, debt adjustments associated with hedges and deferred taxation, comes in at 297p against 309p at the end of June. More positively the company managed to push through some rent increases and occupancy levels nudged up a little to 97%.
The valuation news is highly relevant to the current bid situation around Intu with a consortium led by deputy chairman John Whittaker’s Peel Group, which already owns 26% of the business, mulling a 215p bid.
‘RESILIENT PERFORMANCE’
AJ Bell investment director Russ Mould says: ‘The company also managed to push through some rent increases and this looks like a reasonably resilient performance given the pressures on the retail sector.’
‘As such it may lead shareholders to question the generosity of a proposed offer which, adjusted for dividends, comes in at just 210.4p.’
‘On the other hand, Intu’s high levels of indebtedness, with the loan-to-value ratio increasing from 48.7% in June to 50.6%, could make life as a standalone entity challenging.’
Peel and its partners in Canada’s Brookfield and Saudi Arabian vehicle Olayan have until 1 November to make an official bid or walk away.
Unlike Mould, Liberum which has a ‘sell’ recommendation on the shares and a 145p price target reckons ‘this update aids the relative attractiveness of a 215p potential bid’. With the company’s true position obscured by its ‘elevated leverage’.
