Simon’s offer could derail Trafford Centre bid
SIMON Property Group, the US real estate giant which has been lobbying London-based Capital Shopping Centres (CSC) to abandon its £1.6bn bid for Peel’s Trafford Centre shopping complex, has made an indicative offer of 425p per share for the company.
The bid, which is a 26% premium to CSC’s closing share price of 337p before the Trafford Centre bid was announced, comes with a string of preconditions, though – one of which is that Capital does not complete the Trafford Centre deal and that it opens its books to Simon in order to let it prepare a firm bid.
The company’s chairman and CEO David Simon has sent a letter to CSC’s board proposing the offer this morning. He said that the offer, which is 16% higher than the blended share price of 367p at which CSC proposed to issue equity to pay for the Trafford Centre and was 7% higher than yesterday’s close, was being made to the board in a bid to address previous concerns about their intentions.
“By making this offer, we are confident that we have now answered any objections you have previously expressed,” said Simon.
“We believe that we should work together to announce a recommended offer, and would urge you to listen to calls from your shareholders – many of whom we have spoken to – opposing the Trafford Centre transaction or asking you to adjourn your forthcoming EGM.”
Simon has objected to CSC’s acquisition of the Trafford Centre as it believes CSC is paying too much for the centre and that the deal would destroy shareholder value.
The company said that it is finalising a £3bn bridging loan which would allow the firm to make its all-cash offer.
“We are confident that, subject to successful completion of due diligence, we will be able to obtain sufficient resources to satisfy our proposal in full.
Simon Property Group currently has a market cap of $34bn.
“We believe that our proposed offer is highly favourable and attractive to CSC shareholders,” said Simon.
“We are enthusiastic about this opportunity and committed to dedicating substantial time and financial resources with a view to concluding a transaction as soon as possible.”
