CSC fends off Simon’s £3bn takeover bid

Marion Dakers
US property giant Simon tried to push Capital Shopping Centres (CSC) into scrapping its £1.6bn purchase of the Trafford Centre yesterday with a £2.9bn indicative offer for the entire company.

CSC rejected the 425p-per-share proposal after an emergency board meeting yesterday, claiming the move was “yet another attempt by Simon to frustrate the Trafford Centre acquisition”.

However, CSC delayed its shareholder meeting planned for 20 December, which would have given investors a chance to approve the Trafford deal with current owner Peel Holdings. Peel backed its stance.

Simon welcomed the delay, and urged CSC “to listen to calls from your shareholders – many of whom we have spoken to – opposing the Trafford Centre.”

Its indicative offer represents a seven per cent premium to CSC’s share price on Tuesday, and comes with conditions including the end of the Trafford purchase and access to CSC’s books to undertake due diligence.

Credit Suisse analyst Steve Bramley-Jackson told City A.M. that Simon’s offer was unrealistic. “I don’t think there’s enough financial headroom for Simon to increase its offer to a level acceptable for CSC shareholders.

“A lot of the big CSC investors are involved to maintain exposure to UK property, which they are unlikely to exchange for cash at this stage.”

Capital Shopping Centres shares gained 4.9 per cent to close at 415.6p.


24 November
CSC confirms it in advanced talks with Peel Holdings to buy the Trafford Centre in Manchester for £1.6bn. The deal looks set to be the biggest-ever single property transaction in the UK.

25 November
World’s biggest mall-owner and CSC shareholder Simon Property publishes a letter it wrote ahead of CSC’s announcement, urging it to delay its purchase of the Trafford Centre until it can make a takeover offer. CSC shares gain 12.5 per cent.

8 December
Simon demands to see CSC’s books so it can perform due diligence ahead of a formal takeover offer, threatening to sell its 6.25 per cent stake; CSC refuses.

8 December
Simon sends a letter to the CSC board offering to fund a 400p per share placing, providing Peel Holdings accepts cash rather than a stake in CSC in the Trafford deal. CSC rejects the offer, and Peel writes a letter in support of its position.

15 December: 7am
Simon makes an indicative offer of 425p a share for CSC.

15 December: 2.30pm
Following an emergency board meeting, CSC rejects the offer as “yet another attempt by Simon to frustrate the Trafford Centre acquisition”, but says it will delay its EGM.

Late January 2011
New EGM to vote on Trafford deal.