Hammerson plc has agreed to acquire Villebon 2, a freehold retail park near Paris, at a total cost of £104 million (150 million). The property has a current annual net rental income of £5.4 million (7.8 million).
Villebon 2, which opened in 1988, provides 40,300 m² (433,800 ft²) of retail accommodation and 2,200 car parking spaces. The scheme, which adjoins an Auchan hypermarket with 1,200 car parking spaces, has 44 retailers, including PC City, Animalis, Tati, Toys'R'Us, Aubert, Casa and Darty, making it one of the largest retail parks in France. In addition, Villebon 2 has the required authorizations and building permits for an extension of approximately 5,500 m² (59,200 ft²) of retail space. The retail park is located in Villebon-sur-Yvette, which is in the southwest suburbs of Paris, 20 kilometres from the city.
The transaction will be effected by Hammerson acquiring the entire share capital of a private group of companies owned by Mr P Rochemont, Mrs R Soubai, Mr P de Margerie and Vendomiena. Hammerson will issue 7,071,967 New Ordinary Shares to the vendors as consideration, which represents 2.5% of Hammerson's current issued share capital. Based on a share price of 858p, the shares issued have a value of £61 million (88 million). Hammerson has also assumed approximately £43 million (62 million) of debt and other net liabilities in the acquired companies.
The New Ordinary Shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 25p each in the capital of Hammerson. A condition of the acquisition is that the New Ordinary Shares be admitted to the Official List maintained by the United Kingdom Listing Authority, and to be admitted to trading by the London Stock Exchange, and accordingly such application will be made together with an application for the New Ordinary Shares to be admitted to trading by Euronext Paris. It is expected that the listing and admission of the New Ordinary Shares in London will become effective on Wednesday, 27 July 2005.
John Richards, Chief Executive of Hammerson, commented: "We are committed to expanding our business in France and this transaction represents Hammerson's first retail park acquisition in the country. Villebon 2 is one of the most successful retail park schemes in the Paris region. It has an excellent retail line up and offers significant opportunities to add value through an extension and by active asset management."