CSC rejects Simon bid
Published: 16 December, 2010
£3bn offer condemned as undervaluing portfolio
Capital Shopping Centres has rejected Simon Property Group's 425p-a-share offer, dismissing it as “yet another attempt by Simon to frustrate the Trafford Centre acquisition.” But in a minor victory for Simon, CSC has agreed to adjourn the 20 December EGM, which was to ratify the Trafford purchase.
In a Stock Exchange statement CSC said the offer “very substantially undervalues the company and its prospects. “ It pointed out: “CSC owns an irreplaceable and unrivalled portfolio of regional shopping centres, built up over 30 years, that is impossible to replicate given the barriers to entry in this sector - the enlarged group will own 4 of the top six out-of-town shopping centres in the UK.”
It pointed out that the offer is conditional, and has not even been approved by Simon's own board. And it also slammed Simon's tactics, especially way it has conducted its approach through the media, using a series of “contradictory” open letters.
Simon welcomed the adjournment of the EGM and asserted its offer of 425p per share shows “a substantial premium to CSC's latest NAV and to the price of 367p, at which CSC is proposing to issue 25 per cent of its shares to Peel Group.” It asserted that its board was “fully supportive” of the offer and reiterated its call for CSC to open its books for due diligence.
And Peel Holdings waded into the debate, confirming its commitment to its agreed transaction with CSC. It said: “Peel strongly believes in the future growth prospects of CSC as an independent UK company. The enlarged group, enhanced by the inclusion of the Trafford Centre, will have a unique portfolio of super prime UK regional shopping centres. This portfolio and the addition of Peel’s proven UK retail and leisure property expertise will drive significant incremental future growth for the benefit of all shareholders.”
