L Catterton pays $1.9 billion to buy Value Retail shaer

L Catterton, the private equity firm backed by LVMH Moet Hennessy Louis Vuitton SE, has agreed to acquire Hammerson Plc’s stake in Value Retail, owner of prestigious outlet shopping malls. The deal has an enterprise value of $1.9 billion.

The transaction, which includes stakes in nine luxury retail properties in Europe, generated £600 million in cash proceeds for Hammerson. The company plans to use the proceeds to repurchase up to £140 million of shares and increase dividend payments to 80%-85% of adjusted earnings. Hammerson shares rose more than 10% following the announcement.

The sale enables Hammerson to focus on prime urban real estate and improve its capital structure, reducing its loan-to-value ratio to 23%. For L Catterton, the acquisition is in line with its strategy to invest in prime retail properties and increase control over key locations for its brands.