Simon makes £2.9bn bid for CSC

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Simon Property Group this morning made a £2.9bn indicative takeover offer for Capital Shopping Centres.

The offered price of 425p a share represents an 8% premium to its closing price yesterday of 393p a share.

The offer from CSC’s 5% shareholder has been flushed out by CSC’s proposed £1.6bn purchase of the Trafford Centre from John Whittaker’s Peel Group, a deal which would leave Peel with a 25% stake in CSC.

Simon said that a condition of its offer was that CSC does not push ahead with the Trafford Centre deal. Shareholders vote on the proposal on Monday. On Sunday Simon made an offer to fund the Trafford Centre deal itself, rather than paying for the deal in company shares, as CSC proposed. CSC said this proposal was not workable.

In a letter to CSC’s board, Simon chairman David Simon said he wanted to work with CSC on an offer, rather than move forward with a hostile takeover, although the latter possibility was not ruled out.

“Our interest in making an offer for CSC is, of course, not new,” he said. “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.”

It said its conditions of undertaking the deal were that the Trafford Centre deal be halted, it is given the opportunity to conduct full due diligence and that its board approves the transaction.

The letter said Simon was currently arranging a £3bn bridge loan in order to finance any takeover.

Citigroup, Lazard and Evercore advise Simon. Bank of America Merrill Lynch and UBS advise Capital Shopping Centres. JP Morgan Cazenove advises Peel Group.  


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