Hammerson sells £1.5bn stake in Bicester Village owner

The firm said it would be able to reduce its debts, invest in other assets and hand up to £140 million to shareholders through a buyback as a result.

The company said the sale would generate around £600 million in cash proceeds (Alamy/PA)

Shopping centre giant Hammerson has sold off its stake in the owner of Bicester Village in a deal worth £1.5 billion.

Shares in Hammerson lifted on Monday morning after it announced the sale of its Value Retail business to private equity firm L Catterton, backed by French luxury good giant LVMH (Louis Vuitton Moet Hennessy).

Hammerson, which also owns Birmingham’s Bullring, said the sale will generate around £600 million in cash proceeds.

This is a transformational deal for Hammerson, generating cash proceeds of around £600 million whilst removing an overweight, low-yielding and minority stake, and positioning us for accelerated growth and value creation

Rita-Rose Gagne, Hammerson

The firm told investors it will be able to reduce its debts, invest in other assets and hand up to £140 million to shareholders through a buyback as a result.

It added that the deal would also help support its strategy to focus on urban retail real estate.

Hammerson owned almost 40% of the business, which owns nine luxury shopping destinations, including sites near Barcelona, Paris and Milan.

We are at a point in the cycle where I can now be on the front foot to capture the exceptional value creation opportunities I see in the near, medium and long-term

Rita-Rose Gagne, Hammerson

Rita-Rose Gagne, chief executive officer of Hammerson, said: “This is a transformational deal for Hammerson, generating cash proceeds of around £600 million whilst removing an overweight, low-yielding and minority stake, and positioning us for accelerated growth and value creation.

“I’m excited about the opportunity this gives us to build on our momentum and track record of the last three years.

“We are at a point in the cycle where I can now be on the front foot to capture the exceptional value creation opportunities I see in the near, medium and long-term.

We have deep experience investing in luxury retail, and we are eager to leverage our operational expertise and global network of established relationships to partner with Value Retail and propel the business forward

Michael Chu, L Catterton

“This is exactly what this transaction will deliver.”

Michael Chu, global co-chief executive of L Catterton, said: “With its high-quality portfolio, reputation for luxury, and commitment to delivering a distinctive experience to customers, Value Retail is well positioned for growth and continued success.

“We have deep experience investing in luxury retail, and we are eager to leverage our operational expertise and global network of established relationships to partner with Value Retail and propel the business forward.”

Shares in the business were 3.6% higher on Monday.