Hedge Fund Angle To An Eventual Hammerson Takeover

You can tell that Hammerson is getting the full M&A price volatility treatment. Indeed, it has been since before the announcement of takeover interest, just ahead of which there  was the typical  final flush out and selling climax below 440p in March, just to make sure that no one was in the stock on the long side “by accident.”

Of course, since then the slings and arrows of offer / no offer / rejection et al have been in operation, and caused Hammerson shares to fly around like a penny stock.

hmsologo

But there is a strategic angle here. It is that if a 600p plus offer has been rejected as too cheap, then the stock should be trading near or above this value according to historic M&A precedent, not nearly 200p below.

Already for Friday there has been a reasonable rebound from the 447p intraday low. But one would consider that there will be further offers, and that just as the move in March was a suckers’ flush out, so is the latest gap down.

Indeed, it is suspected that hedgies and other steely traders are dipping into what at these levels is a value situation, as opposed to necessarily a speculative one. The situation could therefore be resolved as quickly as Monday / Tuesday given the price imbalance.

What one may also say strategically is that it is likely that Klepierre would have another bite at the cherry later in the year, especially if Hammerson does not get the Intu purchase over the line in what is said to be a close situation.

hms

But even if it does, our hedge fund friends are likely to be buying on any sub 450p dips, as the floor in the stock has been copper bottomed by recent events. If the Intu deal goes ahead the French can buy on the cheap. If it does not hedge funds through their weight of money may be instrumental in a sale of Hammerson in 6 months anyway.

Disclaimer

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is  recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.

Author: Zak Mir

Financial commentator, interviewer, technical analyst

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