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Lighthouse, which owns nearly 23% of the London-listed company, will vote against two of its board members and is demanding the reinstatement of dividends and the sale of its stake in Bicester Village, Sky News can reveal.
By Mark Kleinman, City editor @MarkKleinmanSky
Hammerson, one of Britain’s biggest shopping centre owners, is facing demands from its biggest shareholder to accelerate asset sales and resume dividend payments ahead of its annual meeting next month.
Sky News can reveal that Lighthouse, the investment vehicle of former Hammerson director Desmond de Beer, has tabled resolutions to appoint two new board members amid simmering discontent over its strategy.
In a letter published in Hammerson’s annual report, Lighthouse, which holds a near-23% stake in the Brent Cross-owner, 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.
“Hammerson is comprised of three divisions: malls, Value Retail and developments. Lighthouse is of the view that Hammerson should dispose of its investment in Value Retail, right-size its exposure to developments and reduce administration costs significantly.”
‘Unnecessary, distracting and value destructive’
Value Retail, in which Hammerson owns a big stake, operates the Bicester Village flagship retail destination, and is widely expected by analysts to be sold in the coming years.
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.
A source close to Hammerson questioned the credentials of Mr Hughes and Mr Tate, saying they were unlikely to be of the calibre required to serve on its board.
“Lighthouse’s proposals are unnecessary, distracting and value destructive. It is the board’s view that neither nominee has the experience or skills that will be additive to our board and it would not be beneficial to appoint them,” a Hammerson spokesman said.
“The board is confident that the strategy and leadership team is the right one and our performance clearly demonstrates strong strategic, operational and financial progress.
“2022 was another year of delivery with like-for-like gross rental income of 8% and adjusted earnings up 60% year-on-year.
“2023 is another important year in the continuing transformation of the group as we focus on execution and create a sustainable platform fit for the future.”
Activist investors
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.
It has been engaged in a protracted programme of disposals which continued this week with the sale of a large Parisian shopping centre.
On Tuesday, Hammerson shares were trading at around 25.9p, valuing the company at £1.27bn.
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