The French shopping centre company Klépierre said it does not intend to make a formal offer for Hammerson, paving the way for the Bullring owner to seal a tie-up with Intu.

Klépierre said on Friday that its chairman, Jean-Marc Jestin, met his Hammerson counterpart, David Tyler, at the beginning of the week to table a £5.04bn proposal worth 635p per share.

After the meeting, Klépierre said in a stock exchange announcement: “The board of Hammerson did not provide any meaningful engagement with respect to the increased proposal and, after careful consideration, Klépierre has concluded that it does not intend to make an offer for Hammerson.”

The latest figure, an advance on Klépierre initial 615p cash-and-shares bid worth £4.88bn, represented a premium of 45% to Hammerson’s share price 16 March.

Hammerson branded Klépierre’s overtures as “wholly inadequate” and “entirely opportunistic”.

Earlier this week, Tyler said: “The board has considered the revised proposal from Klépierre carefully. At 635p, it is only a 3% increase on the previous proposal and continues very significantly to undervalue the company.”

Klépierre’s decision to back off paves the way for Hammerson’s preferred option of a £3.4bn tie-up with rival Intu, which operates the Trafford Centre in Manchester.

Hammerson is expected to press ahead with an all-share takeover of Intu, which would create Britain’s biggest property company with £21bn-worth of assets across Europe, including Bicester Village and Brent Cross shopping centres.

Hammerson shares plummeted more than 13% to 453p after the market opened. Intu’s stock was trading broadly flat.

David Brockton, analyst at Liberum, said: “Klépierre’s decision to walk away from a bid could still leave Hammerson’s management and shareholders in an unfortunate short-term position.

“The market has clearly taken a negative view of Hammerson’s proposed acquisition of Intu. However, if the Intu deal does not complete, it would be a rejection of management’s vision. It will take some doing for the shares to achieve Klépierre’s 635p second proposal in the near-term.”

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