CSC rejects Simon's indicative EUR 3.4b offer

Capital Shopping Centres (CSC) Group has rejected Simon Property Group's indicative offer of up to 425p per share, or £2.9 bn (EUR 3.4 bn), to acquire the UK-listed regional mall owner.

The offer proposal outlined on Wednesday by SPG, the largest shopping centre owner in the US and a shareholder in CSC, was the latest round in a power struggle between the pair. At issue is CSC's plan to buy the Trafford Center in Manchester for about EUR 1.9 bn in a share and debt deal.

'The board of CSC believes the offer 's yet another attempt by Simon to frustrate the Trafford Centre acquisition without putting forward a proper proposal for CSC shareholders to consider as an alternative, and accordingly unanimously rejects the proposal,' CSC said in a statement on Wednesday afternoon.

However, CSC postponed a shareholder vote on the Trafford deal which was to take place at an EGM on 20 December. 'The board has concluded that it is appropriate to adjourn the EGM to endeavour to ensure that CSC’s shareholders are provided with the necessary information about the Proposal to make a clear decision.' The vote is to take place in January.

Earlier, David Simon, chairman of SPG, sent a letter to the CSC board outlining an indicative offer.

'Our interest in making an offer for CSC is, of course, not new. By making this offer on the terms outlined in this letter, we are confident that we have now answered any objections you have previously expressed. 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.'

A precondition for the announcement of a firm offer, Simon wrote, would be that the acquisition of the Trafford Centre not go ahead.

The deal proposed by CSC would give Peel Group, the vendor of the Trafford Centre, a 20-25% stake in CSC and a seat on the board to Peel chairman John Whittaker.

SPG holds a 5% stake in CSC and has argued that the transaction agreement over-values Trafford Center and would allow Peel Group a to obtain a large stake in CSC at a discount. SPG has vowed to vote against the deal at an EMG and has indicated it was interested in making an offer for CSC.