Commercial Real Estate and Simon Property Group and Real Estate Investment Trust and Real estate deals and Real Estate & Retail

Simon lands $4.6B loan to fund offer for London mall owner

December 29, 2010

Simon Property Group Inc., the largest U.S. mall owner, has secured a 3 billion pound ($4.6 billion) loan that will give the company the resources to bid for London-based Capital Shopping Centres Group Plc.

Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley lead a group of banks that agreed to provide the loan, Indianapolis-based Simon said Wednesday in a prepared statement. The agreement will be completed next week.

The loan “would enable Simon to satisfy in full acceptances due under a firm offer for CSC,” Simon said. The company’s own board has given its approval to make a bid for the London-based landlord.

The U.K. Takeover Panel gave Simon until Jan. 12 to announce a “firm intention” to make an offer for Capital Shopping. Simon made a conditional offer of 425 pence ($6.66)  a share on Dec. 15, valuing the United Kingdom company at 2.9 billion pounds. The bid depends on Capital Shopping abandoning a 1.6 billion-pound purchase of the Trafford Centre in Manchester that would give Peel Group, the seller, as much as 25 percent of Capital Shopping.

Capital Shopping, which delayed a shareholder vote on the Manchester transaction by more than a month, to Jan. 26, has refused to allow Simon access to its books, saying the offer “very substantially undervalues the company and its prospects.”

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