The group behind a £1.6 billion deal to snap up Manchester’s Trafford centre has seen shares surge after it revealed a takeover approach from the US.
Capital Shopping Centres, which already owns Lakeside in Essex and 12 other centres in the UK, said US shareholder Simon Property Group had asked it not to proceed with the Trafford move while it prepares a potential offer for Capital.
Capital dismissed the interest and said it was pressing ahead with its plans in the absence of any sign of a firm offer from Simon, which is a major shopping mall owner in the United States.
But Capital’s shares leapt 10% ahead as investors cheered news of takeover interest.
Capital confirmed its Trafford Centre plans on Wednesday and announced further details on Thursday of a deal with current owner Peel Holdings, which is led by billionaire John Whittaker.
Capital is also set to launch a fundraising round alongside the takeover, which involves a purchase price of £750 million plus £850 million of debt and other liabilities.
If the Trafford deal goes through, it would see Peel take a 19.9% stake in Capital and board representation.
It would also cement Capital’s position as the leading UK shopping centre group with 14 malls, including four of the country’s top six out-of-town destinations.
Investors – including Simon Property Group, which owns 5.6% of Capital – will have a chance to vote on the Trafford acquisition and share placing on December 20.
Capital said in a statement on the move by Simon Property: “The letter did not contain any offer or indicative offer nor provide any certainty that an offer would be made. The board of Capital has concluded that it is not in shareholders’ interests to delay the placing and has determined to proceed with the acquisition and placing.”