Intu shares jump on reports of Orion Capital buyout
Shopping centre owner Intu led the FTSE risers this morning following reports of a potential buyout led by Orion Capital Managers.
Read more: Intu share price fall continues after dividend cancellation
Orion, run by private equity tycoon Aref Lahham, is said to be seeking partners for a buyout of the struggling company, which has felt the impact of tough trading conditions for UK retailers.
The Trafford Centre owner suffered an 18 per cent decline in rental income in the first half, while pre-tax loss fell to almost £900m, prompting the firm to cancel its interim dividend.
The slated buyout, reported by the Sunday Times, sent shares up as much as 17 per cent in early trading.
Intu’s share price has plunged more than 60 per cent since the start of the year, as retailers have been forced to close swathes of stores and launch company voluntary agreements to slash rent.
Intu is also battling to pay down its huge £4.7bn debt pile. Analysts have warned the group is at risk of breaching covenants on more than £1bn of this debt as the value of its assets continues to fall.
Read more: Intu share price crashes as it cancels dividend amid retail woes
A takeover bid would likely resolve the debt problem, according to the report. Orion holds a 9.2 per cent stake in Intu, and would need to work with other shareholders such as Peel Holdings, which holds a 27.3 per cent stake, to secure a buyout.
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