Hammerson, the shopping centre owner which is facing shareholder demands for a corporate overhaul, is in advanced talks to offload a stake in a British development project for tens of millions of pounds.
Sky News has learnt that the London-listed company is close to agreeing a deal with Unibail-Rodamco-Westfield to sell its holding in a joint venture between the two groups to redevelop Croydon’s Whitgift shopping centre.
If successfully concluded, the transaction will take Hammerson another step closer to meeting a £500m disposals target by the end of this year.
To date, the company, which owns some of the UK’s landmark retail destinations, including Brent Cross in north-west London has raised proceeds of £340m from asset sales in the UK and Europe.
Offloading the Croydon Partnership stake to Unibail may go some way to placating Lighthouse, Hammerson’s biggest shareholder, which is demanding a resumption of dividend payments and reduce its exposure to development projects.
Hammerson’s management team, led by chairman Rob Noel and CEO Rita-Rose Gagne, has already won backing from a number of big institutional shareholders, including Legal & General Investment Management (LGIM) and Schroders, which between them own more than 6% of the company.
APG, the second-largest investor with 20% of the stock, has also publicly opposed Lighthouse’s proposals.
Lighthouse, the investment vehicle of former Hammerson director Desmond de Beer, which holds nearly 23% of the company, has tabled resolutions to appoint two new board members because of its discontent over the company’s strategy.
In a letter published in Hammerson’s annual report, Lighthouse had said it did “not have confidence in the Hammerson board as currently constituted, having regard to the operational and strategic weaknesses reflected in Hammerson”.
Mr de Beer, who quit the company’s board last October, expressed unhappiness at its record of reducing administration costs.
“Relative to the size of its managed portfolio, Hammerson’s administration costs have increased and objectively are high,” Lighthouse said.
“This is a matter Hammerson can rectify in the short term through disciplined management.”
Lighthouse added that Hammerson, led by CEO Rita-Rose Gagne, had shifted its focus “away from its core proposition as a retail REIT [real estate investment trust]”.
“Despite owning world-class malls which continue to perform well, Hammerson trades at a discount to net asset value of over 50%,” it added.
It wants Hammerson to sell its stake in Value Retail, which operates the Bicester Village flagship retail destination.
Lighthouse said it would vote against the re-election of “at least” two of Hammerson’s non-executives at the AGM in early May, and has nominated Nick Hughes and Craig Tate as replacement directors.
Hammerson has urged shareholders to reject Lighthouse’s proposals.
It is not the first time that Hammerson has faced unrest from activist investors.
In 2018, Elliott Advisers took a stake in the company and pushed for assets sales, before reaching a compromise deal over the prospective reshaping of its board.
Hammerson subsequently raised £550m in a rights issue as it contended with the impact of the pandemic, and also its chairman and chief executive in short order.
On Thursday, shares in Hammerson were trading at around 26.1p, valuing the company at £1.33bn.
Hammerson declined to comment on the talks with Unibail.