CSC clashes with investor over mall bid

Stephen Dinneen
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A ROW between Capital Shopping Centres (CSC) and one of its biggest shareholders boiled over yesterday over the property firm’s plan to buy the Trafford Centre.

Simon Property Group, which owns five per cent of CSC, has slammed the bid and says it will rethink its plans to make an offer to buy the whole of the UK-based property giant. It also said it would consider offloading its stake in CSC in protest at the “value destructive” acquisition.

Simon Property has demanded CSC hands over due diligence information regarding the proposed £1.6bn acquisition of the Manchester-based shopping centre and says it will vote against the bid at an upcoming shareholders’ meeting.

CSC will require 50 per cent of its shareholders to vote in favour of the bid, which will see Trafford Centre owner John Whittaker take a 20 per cent holding in the firm. No cash will be involved in the transaction.

Last month CSC raised £209m through a share placement to help fund the bid and pay down debt.

A CSC spokesman told City A.M. it has not received a bid from Simon Property and plans to press ahead with its Trafford Centre plans, calling it “one of the finest shopping centres in Europe” and a “unique opportunity”.

If CSC acquires the Trafford Centre, it would own 10 of the top 25 UK malls, cementing its status as a retail heavyweight.

CSC was formed out of the demerger of Liberty International earlier this year. It had recently ruled out acquisitions saying it planned to grow organically in its existing malls.



SIMON Property Group has hired Citigroup as its sole financial adviser. Heading up the team will be Philip Robert-Tissot. Robert-Tissot has been involved in a number of major takeovers in recent years, advising Kraft on its deal to buy Cadbury and acting as lead adviser for Spanish construction firm Ferrovial in its takeover of BAA in 2006. He is currently Citigroup’s UK managing director.

Grant Kernaghan from Citigroup’s global markets division is also on the team. He represented Onex and the Canada Pension Plan Investment Board in their spat with components manufacturer Tomkins earlier this year. He also guided outsourcing company Xchanging through its £530m flotation in 2007.

Capital Shopping Centres (CSC) has taken on Bank of America Merrill Lynch and UBS to advise on the acquisition. Simon Mackenzie-Smith and Simon Fraser are heading the team at BoA. Mackenzie-Smith has been with Merrill Lynch since 1996, when he joined as managing director of investment banking. He has been involved in a wide range of mergers and acquisitions and restructurings – including Punch’s acquisition of managed pubs operation Spirit in 2006. Co-head of corporate broking Simon Fraser has spent 14 years at the bank, working alongside Mackenzie-Smith on the Segro, Debenhams and Liberty deals, as well as Inchcape, Natex and SSE. UBS corporate broking managing director Jonathan Bewes and head of investment banking Hew Glyn Davies are also advising.