Belfast Telegraph

Sunday 20 April 2014

Refusal to open books scuppers shopping mall deal

A US property giant has dropped its £3bn pursuit of Britain's biggest shopping mall owner after failing to gain access to its books.

Simon Property Group, which owns or has an interest in 393 properties worldwide, said it was left with no alternative but to walk away because Capital Shopping Centres refused to share due diligence information.

Capital rebuffed an approach from Simon before Christmas and accused the US firm of trying to frustrate its bid to buy Manchester's Trafford Centre. It is already one of the leading UK shopping centre groups with 14 centres, including the Lakeside and Metro centres among four major out-of-town destinations.

Simon, which is a minority shareholder of Capital, had until Wednesday's "put up or shut up" deadline to declare whether it intended to make an offer.

Despite pulling the takeover approach, it said it continued to oppose the "value-destructive" Trafford Centre transaction and urged its fellow Capital shareholders to vote against it at a meeting on January 26.

The US giant believes the £1.6bn bid price for the Trafford Centre is too high and undervalues Capital by giving away shares to the mall's owner Peel Holdings, which is controlled by billionaire John Whittaker.

Simon pitched its offer for Capital at 425p a share but the UK firm underlined its opposition on Friday by claiming it was worth up to 625p a share.

In response, Simon said this was "wishful thinking", adding yesterday:

"If the Capital board really believes in this potential value, why are they proposing to issue 33% of the company's existing shares to Peel at a price of 400p, thereby diluting existing shareholders?"

The Trafford Centre offers 1.9 million square feet of retail, catering and leisure space and attracts around 35m customer visits a year.