IBJNews

British mall owner rejects Simon financing plan

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. The Affordable Care Act is not the reason for the slow recovery and lack of high paying jobs for low skill workers. This is a trend that has been going since the early 80's. The recovery is real in the sense that GDP has been growing steadily at a rate of roughly 2.5% since the recession ended in late 2009 (newsflash, the stimulus worked) and the unemployment has been steadily dropping. The reason issue we are facing deals with a skills gap (not enough workers with the right credentials / experience) and wage stagnation due to corporate America being focused solely on maximizing profits for shareholders and not caring about the American middle class. Why should they? Multi-billion dollar mutlinational companies keep offshoring their profits in order to avoid paying taxes (which makes our deficit worse) they convince Americans to fight amongst themselves. If you want to create jobs and reduce the deficit, raise the minimum wage and change corporate tax laws. Of course, if you want to continue to belive that tax cuts for wealthy create jobs (which they don't) and allow corporations and the wealthy to continue to make you cover more and more of the costs of maintaining infrastructure, funding the military and other government services, then keep voting Republican. Hopefully someday you wake up and realize what's been going on since Reagan took office.

  2. Helloooooo, my name is Kate. I am so joyous to share this wonderful testimony about what Dr. Osoijiakhena, a great spell caster, did for me and my family. I wedded a year and 6 months ago, we were very happy during this whole period, i really love my husband so so much. I started noticing changes when he started coming home late at night, he stop paying attention to me, i later found out that he was having an affair with another lady, i dont know what she did to get to him but she really got a hold on him. He started spending weekends with her, and threaten for divorce. I was so heart broken and devastated, i spent many night thinking on how to get my husband back. A friend took it upon herself to to introduce me to one Dr. Osoijiakhena, a great spell caster, who once helped her with a spell that reunited her family and helped her husband secure a very prolific job. Though i had my doubts and never believed, but i decided to give it a try because i was helpless. I contacted Dr. Osoijiakhena, the Spell caster, to help me reunite my family by bringing back my husband from that other woman and break whatever hold she had on him. He only just told me that it's a minor issue, once i provide and do everything he will ask me to do, then i will have my family back again. I did everything he required. And he did it!!!!! My husband returned back to me and pleaded for forgiveness, and i also secured a well paid job in a big company, just as the great spell caster, Dr. Osoijiakhena said. I am so so happy to share my testimony on this wall. I am using this medium to tell every one that has same or similar problem to try the great Dr. Osoijiakhena through his mail: drosoijiakhenaspell@gmail.com......he is so real!!!!! He can also help you with: (1) IF YOU WANT YOUR EX GIRL/BOYFRIEND TO RETURN BACK TO YOU (2) IF YOU WANT YOUR HUSBAND/WIFE BACK (3) IF YOU WANT TO BE PROMOTED IN YOUR OFFICE (4) IF YOU WANT YOUR MAN OR WOMAN TO LOVE YOU (5) IF YOU WANT A CHILD (BARREN) (6) IF YOU WANT TO BE RICH/WEALTHY (7) IF YOU WANT YOUR HUSBAND/WIFE TO BE YOURS FOREVER (8) IF YOU'VE BEEN SCAMMED AND WANT YOUR MONEY BACK (9) IF YOU ARE HAVING DELAY IN GETTING MARRIED (10) IF YOU HAVE A COURT CASE AND WANT TO WIN (11) IF YOU'RE A DRUG ADDICT AND YOU WANT TO REALLY STOP (12) IF YOU CANNOT IMPREGNATE A WOMAN (STERILE) (13) ALL TYPES OF DISEASES I advise you to contact the great Dr. Osoijiakhena, the spiritualist for solutions via his email: drosoijiakhenaspell@gmail.com

  3. Sergeant McNally is buried in Cathcart Cemetery on a hill known as McNally%u2019 Hill. The Cemetery is in a natural bushland setting and is very well maintained.The emergency department at Ararat Hospital is known as the John McNally Emergency Department. Cathcart is approx. 4.6 km from Ararat and is approx. 345 m above sea level.

  4. My spring chicken of a Mom is turning 75 years young. She is a big fan of Frankie and I think she would get a big kick out of the film. I wanted to take her to the Broadway play but am priced out. Thanks for your time and consideration. Oh yea, Wildwood! Joie

  5. I thought this company would go bankrupt in 2013/2014. I predicted that four years ago. I was wrong. It will take another couple of years, but they will get there.

ADVERTISEMENT