US-based Simon Property Group (SPG) claimed on Wednesday that the proposed EUR 1.9 bn acquisition by London-listed Capital Shopping Centres of the Trafford Centre in Manchester would inflict 'profound value destruction' on CSC and its shareholders.
US-based Simon Property Group (SPG) claimed on Wednesday that the proposed EUR 1.9 bn acquisition by London-listed Capital Shopping Centres of the Trafford Centre in Manchester would inflict 'profound value destruction' on CSC and its shareholders.
Simon Property owns more than 5% of CSC's shares. Its initial plea last week for a halt to the acquisition process pending a takeover offer was rejected by CSC's board as lacking even an indicative offer.
David Simon, chairman and CEO of SPG, fired back on Wednesday in a strongly worded letter to the CSC board.
In the first instance, he dealt with a report in the Wall Street Journal that suggested SPG was likely to abandon its takeover ambitions. The US group, he emphasised, was still considering making a buy-out offer that would be a 'superior alternative' to the Trafford Centre deal. Simon repeated a request to the CSC board to allow limited access to due diligence information.
Noting that the first request for access to CSC's books was rejected, Simon said that his company intends to vote against the Trafford Centre deal and would urge other shareholders to do the same during the Extraordinary General Meeting on 20 December.
He said that Simon Property Group would have to abandon its takeover plans if the due diligence information was not forthcoming. He also warned: 'If the proposed Trafford Centre acquisition is approved, we would need to consider liquidating our position in CSC.'
CSC's board issued its response later on Wednesday morning, saying: 'CSC has not received any indicative offer from SPG. In light of this, the board, mindful of its fiduciary duties, continues to believe that it is not appropriate to provide SPG with the non-public due diligence information it has requested.'
CSC added that the combined circular and prospectus sent to CSC shareholders contains comprehensive information regarding CSC and the Trafford Centre.
'The board considers that SPG’s analysis published today is selective and creates an inaccurate representation of the overall transaction. As stated in the circular, the overall transaction is expected to have a neutral impact on earnings per share in the first full year and on NAV per share. The long dated CMBS debt related to the Trafford Centre is an attractive component of the transaction, enhancing the overall financial position of CSC and lengthening its average debt maturity, CSC's board said.