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A pair of leading City institutions have thrown their weight behind Britain’s biggest shopping centre owner amid demands from its biggest shareholder to speed up asset sales and resume dividend payments.

Sky News can reveal Legal & General Investment Management (LGIM) and Schroders, which between them own more than 6% of Hammerson, are backing its board’s strategy in the face of a proxy battle.

Hammerson owns some of the UK’s landmark retail destinations, including Brent Cross in northwest London.

It is chaired by Rob Noel, the former Land Securities boss and one of Britain’s most experienced property figures.

Lighthouse, the investment vehicle of former Hammerson director Desmond de Beer, which holds nearly 23% of the company, has tabled resolutions to appoint two new board members because of its discontent over the company’s strategy.

Its campaign began to unravel on Friday, however, when APG, the second-largest investor with 20% of the stock, also opposed Lighthouse’s proposals.

In a statement issued to Sky News, a Schroders spokesperson said: “As a long-term active investor in Hammerson, our aim is to use our influence to engage constructively and thoughtfully with the companies in which we invest.

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“We support the board’s strategy of divestment and deleveraging, and believe the current board is well-positioned in regards to skills, experience and diversity.

“As such, we will not be supporting the shareholder resolutions proposed by Lighthouse Properties plc at the upcoming annual meeting.”

Meanwhile, an LGIM spokesperson said it remained “supportive of Hammerson’s board and the management team, and we agree with the decision to retain cash to further strengthen the balance sheet rather than paying a final dividend for 2022”.

“Our view is that the resolutions proposed would act to destabilise the board and disrupt the organisation.

“Long-term shareholder value creation should continue to be the priority for Hammerson, and at this point we believe the board composition as it stands is optimal to deliver this.”

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Call for ‘disciplined management’

Moerus Capital Management and Stanlib, which collectively hold 2% of Hammerson’s shares, also oppose Lighthouse.

In a letter published in Hammerson’s annual report, Lighthouse had 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,” it added.

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.

It wants Hammerson to sell its stake in Value Retail, which operates the Bicester Village flagship retail destination.

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.

‘Unnecessary, distracting… destructive’

“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,” he added.

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 lost 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 Friday, shares in Hammerson were trading at around 25.9p, valuing the company at £1.27bn.

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Good economic news as sunny weather boosted retail sales

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Good economic news as sunny weather boosted retail sales

Retail sales grew in June as warm weather boosted spending and day trips, official figures show.

Spending on goods such as food, clothes and household items rose 0.9%, the Office for National Statistics (ONS) said.

It’s a bounce back from the 2.8% dip in May, but last month’s figure was below economists’ forecast 1.2% uplift as consumers dealt with higher prices from increased inflation.

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Also weighing on spending was reduced consumer confidence amid talk of higher taxes, according to a closely watched indicator from market research firm GfK.

Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.

Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.

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What does ‘inflation is rising’ mean?

Where have people been shopping?

June’s retail sales rise came as people bought more in supermarkets, and retailers said drinks sales were up.

While hot and sunny weather boosted some brick-and-mortar shops, the heat led some to head online.

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Non-store retailers, which include mainly online shops, but also market stalls, had sold the most in more than three years.

Not since February 2022 had sales been so high as the Met Office said England had its warmest ever June, and the second warmest for the UK as a whole.

The June increases suggest that the May drop was a bump in the road. When looked at as a whole, the first six months of the year saw retail sales up 1.7%.

Filling up the car for day trips to take advantage of the sun played an important role in the retail sales growth.

When fuel is excluded, the rise was smaller, just 0.6%.

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Despite lower consumer sentiment and more expensive goods, consumers are benefitting from rising wages and are cutting back on savings.

The ONS lifestyle survey – backed up by hard data like the Bank of England’s money and credit figures – shows that households have rebuilt their rainy day savings and are cutting back on the amount of money they squirrel away each month.

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Former Poundland owner lines up advisers as restructuring looms

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Former Poundland owner lines up advisers as restructuring looms

The former owner of Poundland is lining up advisers to supervise its transition to new shareholders through a court-sanctioned process that will involve store closures and job cuts at the discount retailer.

Sky News has learnt that Pepco Group, which is listed on the Warsaw Stock Exchange, is drafting in FRP Advisory weeks after it struck a deal to sell Poundland to Gordon Brothers.

Industry sources said FRP had been asked by Pepco to act as an observer, with the High Court scheduled to sanction a restructuring plan in the last week of August.

Under the proposed deal, 68 Poundland shops would close in the short term, along with two distribution centres.

More shops are expected to be shut under Gordon Brothers over time, resulting in hundreds of job losses.

Pepco is said to be particularly focused on IT systems which Poundland uses in common with Pepco’s operations in Poland.

Barry Williams, managing director of Poundland, said at the time of the deal’s announcement: “It’s no secret that we have much work to do to get Poundland back on track.

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“While Poundland remains a strong brand, serving 20 million-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth.

“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores.

Prior to the deal’s announcement, Poundland employed roughly 16,000 people across an estate of over 800 shops in the UK and Ireland.

Tax hikes announced by Rachel Reeves, the chancellor, in last autumn’s Budget have increased the financial pressure on high street retailers.

In recent months, chains including WH Smith, Lakeland and The Original Factory Shop have changed hands amid challenging circumstances.

In June, Sky News revealed that River Island, the family-owned clothing retailer, was also working with advisers on a rescue plan aimed at averting its collapse.

Pepco and Poundland declined to comment.

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TalkTalk dials up £100m investment from Ares Management

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TalkTalk dials up £100m investment from Ares Management

TalkTalk, the telecoms and broadband group, has secured a £100m capital injection from one of its existing backers in a deal that will relieve the growing financial pressure on the company.

Sky News has learnt that Ares Management has agreed to provide the new funding in two tranches, with the first £60m said to be imminent.

A deal could be announced as soon as Friday afternoon, according to banking sources.

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The funding agreement comes amid discussions between TalkTalk and its bondholders about a potential break-up of the company, which would involve the sale of its consumer arm and PXC, its wholesale and network division.

Those disposals are now not expected to be launched in the short term.

One person close to the situation said that in addition to Ares’s £100m commitment, TalkTalk had raised £50m from two disposals in March and June, comprising the sale of non-core customers to Utility Warehouse.

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There was also an in-principle agreement to defer cash interest payments and to capitalise those, which would be worth approximately £60m.

TalkTalk has been grappling with a strained balance sheet for some time, and recently drafted in advisers from Alvarez & Marsal, the professional services firm, to assist its finance function.

The group has more than 3m broadband customers, making it one of the largest players in the UK market.

It completed a £1.2bn refinancing late last year, but has been under pressure from bondholders to raise additional capital.

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Last month, the Financial Times reported that BT’s broadband infrastructure arm, Openreach, could block TalkTalk from adding new customers to its network in an escalating dispute over payments owed to BT Group.

TalkTalk, which was taken private in 2021, and Ares both declined to comment.

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