The owner of Lakeside and Metro shopping centres has rejected a proposed takeover bid from a US shareholder and accused the firm of attempting to “frustrate” its plans to buy Manchester’s Trafford Centre.
Capital Shopping Centres said Simon Property Group’s indicative offer of 425p per share undervalued the company at nearly £3 billion.
Simon, which owns 5% of Capital, made the offer on condition the UK firm drops its plans to buy the Trafford centre in a deal worth £1.6 billion.
The two companies have been locked in a bitter battle since Capital offered to buy Trafford from Peel Holdings, giving the company controlled by billionaire John Whittaker nearly 20% of its shares.
A statement from Capital said: “The board of Capital believes this is yet another attempt by Simon to frustrate the Trafford Centre acquisition without putting forward a proper proposal for shareholders to consider as an alternative, and accordingly unanimously rejects the proposal.”
Capital said Simon had indicated no timescale in relation to announcing a firm – rather than indicative – offer and had approached the Takeover Panel to establish a latest date by which Simon must make a formal offer. Capital added that it still believes the inclusion of the Trafford Centre in its portfolio will significantly enhance the company’s value.
It has adjourned the extraordinary general meeting to vote on the Trafford deal until next year, so it can provide shareholders with necessary information on Simon’s proposal.
Simon, based in Indianapolis, accused Capital of overpaying for the Trafford Centre and said the deal would destroy the value of the company. The major shareholder wanted the acquisition to be put on hold while it looked at a possible takeover bid for Capital, but the British company has so far given its pursuer short-shrift in the absence of any firm offer.
Capital said the Trafford acquisition would cement its position as the leading UK shopping centre group with 14 centres, including four of the country’s top six out-of-town destinations.
In an open letter to Capital, David Simon, chief executive of Simon, said the proposal answered any objections previously expressed by Capital. He said: “We believe our proposed offer is highly favourable and attractive to CSC shareholders. We are enthusiastic about this opportunity and committed to dedicating substantial time and financial resources with a view to concluding a transaction as soon as possible.”