CSC analysts doubt Simon’s £3bn bid talk

Marion Dakers
SIMON Property’s £3bn indicative offer for Capital Shopping Centres (CSC) was largely met with scepticism from property experts yesterday.

Analysts called for clarity over Simon’s motives following its 425p-per-share approach to buy the company on the condition it terminates its £1.6bn purchase of the Trafford Centre in Manchester.

“It’s difficult to see whether Simon want the Trafford Centre for themselves, or want to take over Capital, or both or neither,” said John Cahill of Evolution Securities.

“Trying to take over CSC at this price is inconsistent. Simon has complained the five per cent yield from the Trafford Centre deal is too expensive, but if it ends up bidding 450p then that places a five per cent yield on CSC’s existing assets.”

Analysts at Liberum Capital said “there could be an element of spoof about the bid process” and put the fair value of a bid between 458p and 512p.

“Thwarting the acquisition is the short-term goal and forcing an adjournment of the EGM to approve the transaction is the first success, but 100 per cent ownership of CSC can probably wait.”

Meanwhile, bankers in the UK and South Africa did a roaring trade in CSC’s shares following the offer. Traders at UBS bought 3.5m shares before selling 2.1m, while Citigroup turned over 18m shares, or 2.6 per cent of the company, as the price rose.

Simon has claimed some shareholders share its concerns about the Trafford Centre, but declined to name them yesterday. CSC closed 0.75 per cent up at 418.7p yesterday.