Exclusive by Adam Jupp
THE proposed sale of the Trafford Centre could collapse if the firm looking to buy it receives a takeover offer of 450p per share or more.
Analysts say investors in Capital Shopping Centres (CSC) could be tempted to sell to Simon Property Group if the US firm tables a bid above its current indicative proposal of 425p per share.
Speculation at the weekend suggests that Simon is already considering upping its offer to 435p per share, valuing CSC at £3.1bn.
Simon has said any concrete offer is conditional on CSC abandoning the £1.6bn deal it has struck with Peel Group to acquire the Manchester mall.
The Indianaoplis-based mall owner has until 5pm on January 12 to indicate whether it will make a concrete offer.
CSC rejected its indicative proposal, saying it remained committed to the transaction and that 425p significantly undervalued the company.
But Execution Noble analyst Michael Burt said: “I would argue there’s an element of posturing in there.
“A price of 425p may be insufficient to do business, but the fact remains that there is a price for anything.”
Shareholders were set to vote on the deal – which would see Peel become CSC’s largest shareholder, with a 19.9 per cent stake – at an extraordinary general meeting scheduled for Monday, December 20.
But CSC agreed to adjourn it until late January after receiving details of the indicative proposal from Simon, which already has a five per cent stake in CSC.
Despite postponing the special meeting, CSC rejected Simon’s proposal, saying the company was trying to “frustrate the Trafford Centre acquisition” and pointing to the fact no concrete offer had been made.
Mr Burt said: “So, the language is very aggressive but there comes a point when people will do business and I think that price is probably lower than 500p.”
He added: “Some UK shareholders are already saying they would bite Simon’s hands off at 425p.
“At the end of the day, Peel will be getting in at 367p and shareholders are now being told they could be offered 425p or more, so that’s an attractive option, there is no doubt about it.”
The Trafford Centre agreement would see Peel invest £75m and transfer the mall to CSC, in exchange for a 19.9 per cent stake. Peel owner John Whittake
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