Lvmh's Catterton fund enters the capital of Value Retail
Private equity buys 42% of outlet chain from Hammerson
3' min read
3' min read
L Catterton enters the capital of Value Retail. The private equity firm, which is part of the French luxury group Lvmh, will value the outlet company at an enterprise value of GBP 1.5 billion (USD 1.9 billion) with the deal. For its part, Hammerson said it will receive GBP 600 million for the sale of the stake. Capital that will be used to reduce debt and to make investments in the core business.
On the London Stock Exchange, Hammerson's shares opened up more than 10%, the biggest jump in eight months, as a share buyback plan of up to EUR 140 million was announced following the private equity fund's investment. In addition to an increase in the pay out ratio to 80-85%.
L’acquisizione
L Catterton's investment includes nine luxury retail properties outside major European cities, including the Bicester outlet about 60 miles northwest of London. This is fresh capital for Hammerson, which has a multi-year divestment plan to reduce debt following the collapse in rents and retail property values.
"The transaction will ensure that our portfolio focuses on prime urban real estate with a transformed capital structure and the ability to pursue our strategy in higher yield opportunities with higher returns, while improving returns for shareholders," comments Rita-Rose Gagne, Hammerson's CEO.
For its part, L Catterton is increasingly looking to enter the retail sector in order to offer the Lvmh group greater control over the positioning of the group's brands in shops. "We have deep experience in investing in luxury retail and we look forward to leveraging our operational experience and global network of established relationships to partner with Value Retail and drive the business forward," noted Michael Chu, global co-chief executive officer of L Catterton, which was advised by JPMorgan Chase in the transaction, while Hammerson had Eastdil Secured, Morgan Stanley and Lazard at its side.
