Property group Capital Shopping Centres (CSC) has rejected proposals put forward by Simon Property Group (SPG) to fundamentally change its Trafford Centre transaction with Peel Group, it was announced today.
CSC has labelled the SPG’s suggestion as “incapable of implementation and completely impracticable”.
SPG, a major shareholder in and potential buyer of CSC, is opposed to the deal for the Trafford Centre shopping hub which will see the centre’s current owner Peel Group Chairman John Whittaker become CSC’s largest shareholder and non-executive board member.
In its proposal issued yesterday, SPG suggested that instead CSC could issue 153.3 million new ordinary shares at 400p per share and £209 million of bonds convertible into 52.2 million new ordinary shares directly to SPG for cash.
The issue would be subject to a claw-back of 50 per cent by existing CSC shareholders.
A statement issued by CSC countered: “It is not open to CSC unilaterally to alter the terms of its legally binding contract with Peel. Therefore, what SPG proposes does not provide a genuine alternative for CSC shareholders.”
“The CSC Board continues to believe it is in CSC shareholders’ best interests to proceed with the acquisition on the terms agreed with Peel which represents a compelling transaction of significant benefit to CSC shareholders.”
Peel Group also responded to Simon’s proposal today, in a statement which said: “Peel has no intention of selling the Trafford Centre for cash and this has never been an aim of the group - in spite of the fact that Peel has been advised a cash sale would achieve a higher price - and nor does Peel intend entering into such a discussion.
“Rather, Peel’s stated objective is to increase and diversify its exposure to the UK shopping centre market via a long-term investment in CSC.
“The transaction will bring to CSC the value of John Whittaker’s extensive experience in the retail and leisure property sectors and, through the addition of the Trafford Centre, will create an unrivalled portfolio of UK regional shopping centre assets.”
An extraordinary general meeting is being held on December 20th where CSC shareholders will be asked to vote on the Trafford Centre deal.