Capital presses ahead with Trafford Centre bid despite US interest

A POTENTIAL bid by US shopping centre giant Simon Property Group for Capital Shopping Centres should not lead to the latter’s bid for the Trafford Centre being shelved.

Reports emerged last week that Simon Property Group had written to Capital Shopping Centres informing them that it was preparing a bid for it, which would be in excess of Capital’s net asset value at June 30, which was £2.3bn.

Simon already owned 5.6% of Capital’s shares prior to the announcement of Capital’s proposed £1.6bn acquisition of  the Trafford Centre last week and wrote to the firm once news of the deal broke last Wednesday asking for the transaction to be postponed until it prepared the offer.

However, in its prospectus announcement Capital’s management said that the letter from Simon “did not contain any offer or indicative offer nor provide any certainty that an offer would be made”.

As a result, the firm has decided to press ahead with the deal, which will see Capital stump up £748m in equity payment and also involves a payment of £77m by the Trafford Centre’s owner Peel Group.

The deal would give Peel’s founder John Whittaker a 19.9% stake in Capital Shopping Centres and a seat on the board as deputy chairman.

Simon Property Group is the largest property owner in the US with stakes in more than 393 properties with a combined 264m sq ft of space.

A general meeting of Capital’s shareholders has been proposed for December 20 to approve the deal.