LVMH-owned L Catterton snaps up Value Retail stake for 1.5 billion pounds

A newly formed company under the banner of private equity firm L Catterton has snapped up a stake in Value Retail, the owner of UK retail destinations like Bicester Village, which had formerly been held by British property firm Hammerson.

The deal, which will see Value Retail transferred to Silver Bidco Limited, a Jersey incorporated firm established by affiliates of L Catterton, amounts to an enterprise value of 1.5 billion pounds, generating 600 million pounds in cash proceeds for Hammerson.

The retail giant said the proceeds from the “disposal” of Value Retail would support a reduction in net debt, a reinvestment into assets of its core market that yield higher returns and a return of capital to shareholders via a buy back of up to 140 million pounds, representing 10 percent of its market capitalisation.

Hammerson said the sale, which remains subject to customary antitrust approvals and is expected to be completed in the second half of 2024, reflected the “best interests of shareholders as a whole”.

In a regulatory filing, Hammerson CEO, Rita-Rose Gagné, called the deal “transformation” for the firm that removed a “low yielding and minority stake” to help position the company for “accelerated growth”.

Hammerson to use ‘transformational’ disposal to refocus on higher yielding business

Gagné added: “The disposal focuses our portfolio on prime urban real estate with a transformed capital structure and the capacity and capability to advance our strategy in higher yielding opportunities with stronger returns, whilst enhancing returns to shareholders.”

As such, Hammerson is continuing to accelerate its strategic mission of becoming a “retail-anchored” firm positioned for growth through a “portfolio comprising leading city centre destinations”.

Meanwhile, Michael Chu, the global co-CEO of L Catterton, which is jointly owned by luxury giant LVMH and Groupe Arnault, 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.”