Capital Shopping Centres Group Plc, Britain’s biggest shopping-mall owner, rejected a financing plan that would have given potential suitor Simon Property Group Inc. a larger stake in the company.

Capital Shopping can’t unilaterally change a binding agreement to buy the Trafford Centre mall in Manchester, England, from Peel Group, the London-based company said in an e-mailed statement Sunday. Indianapolis-based Simon’s offer is not a “genuine alternative,” it said, and shareholders should vote for the existing plan.

The rejection is yet another blow to Simon’s plans to increase its influence in Capital Shopping. The British company refused to postpone its planned 1.6 billion-pound ($2.5 billion) purchase of Trafford Centre to consider a possible takeover bid by Simon and it later declined to provide the U.S. company with financial information necessary to evaluate a bid.

“The Simon Group takeover moves from unlikely to seemingly impossible,” John Cahill, an analyst at Evolution Securities in London, said in a note to investors. It’s “curious” that Simon first said the price for Trafford Centre was too high and then proposed to finance the deal itself, said Cahill, who has a “sell” rating on Capital Shopping.

Simon said Sunday it would be prepared to subscribe to a sale of 205.5 million Capital Shopping shares at 400 pence each. The proposal, which it said was “more attractive” to Capital Shopping shareholders than the current financing plan, would include a sale of 209 million pounds of convertible bonds by Capital Shopping.

The financing proposal by Simon, which has owned at least 3 percent of Capital Shopping since August 2008, would give the Indianapolis company a holding of between about 18.4 percent and 26.9 percent in Capital Shopping and a seat on its board, Capital Shopping said.

Peel Group would end up with as much as 25 percent of Capital Shopping under the agreement for the sale of Trafford Centre for about 750 million pounds in stock and the assumption of 850 million pounds of debt.

The total purchase price would be the highest ever paid for a British property. Investors are scheduled to vote on whether to approve the transaction on Dec. 20.

Peel has no intention of selling the mall for cash, even if it resulted in a higher price, the company said in a separate statement Monday. Peel wants a stake in Capital Shopping to spread its exposure to the U.K. shopping mall market. The combination of Peel owner John Whittaker’s experience and Capital Shopping “will create an unrivaled portfolio of U.K. regional shopping centre assets,” it said.

Simon, the biggest mall owner in the U.S., has said the U.K. company is “substantially overpaying” for the mall. Its own plan “solves a significant concern that has been expressed about the Trafford Centre acquisition in its current form,” Simon said in a letter to Capital Shopping Sunday.

“Peel has reiterated to the CSC board its consistent view that it wishes to remain invested in U.K. regional shopping centers and does not wish to sell the Trafford Centre for cash as SPG is suggesting,” Capital Shopping said. “The CSC board continues to believe it is in CSC shareholders’ best interests to proceed with the acquisition on the terms agreed with Peel.”

Simon said last month it was considering an unspecified cash bid worth more than Capital Shopping’s net assets and asked for a delay on the Trafford Centre purchase.

Simon may sell its stake in Capital Shopping if the Trafford acquisition is approved, it said Dec. 8 in a statement.

“We are deeply disappointed that CSC has failed to give our proposal due consideration, and in so doing, has ignored the concerns of both Simon and other long-term CSC shareholders,” a Simon representative said in statement late Sunday.

CSC should adjourn its planned shareholder meeting to give it more time to consider Simon’s proposal, the U.S. company said. If an alternative financing plan isn’t possible, they should vote against the mall purchase.