Simon Property Group approach
Letter from Simon Property Group
In connection with the Trafford Centre Acquisition and Placing, the Simon Property Group, Inc.(”Simon”) a 5.6 per cent. shareholder in Capital Shopping Centres, was contacted on 23 November 2010.
Subsequently Simon requested in a letter to CSC received on 24 November that CSC not proceed further with the Acquisition and Placing until it had had the opportunity to present CSC with a potential cash offer for the Company at an unspecified premium to NAV. The letter did not contain any offer or indicative offer nor provide any certainty that an offer would be made. The Board of CSC concluded that it is not in shareholders’ interests to delay the Placing and has determined to proceed with the Acquisition and Placing. Shareholders in the Company will have an opportunity to vote on the Acquisition at the Extraordinary General Meeting which has been convened for 20 December 2010. This has been communicated to Simon.
As required under the City Code on Mergers and Acquisitions (the “Code”), both CSC and shareholders are now required to make certain disclosures when required to do so by circumstances. Details of the Simon approach and a summary of the disclosure requirements of the Code are set out in the announcement made by CSC on 25 November 2010.
On 30 November 2010. as required under Rule 2.10 of the Code, CSC announced an increase in its issued shares, which affects the calculation of shareholders’ percentage interests for the purposes of their disclosures required under the Code.
On 8 December Simon again wrote to the board of CSC setting out its opposition to the Trafford Centre Acquisition. In response, CSC announced that it had not received any indicative offer from Simon and that it continues to believe it is in shareholders’ best interests to proceed with the acquisition.
On 12 December 2010 Simon Property Group suggested fundamental changes to the terms of the Trafford Centre acquisition. CSC announced that it considers that what Simon Property Group suggested is incapable of implementation and completely impractical.
On 15 December 2010 Simon issued an indicative Proposal of 425 pence per share in cash for the shares of CSC’s other shareholders. After consideration, the Board of CSC announced that it believed the Proposal to be an attempt by Simon to frustrate the Trafford Centre acquisition without putting forward a proper proposal for CSC shareholders to consider as an alternative, and accordingly the Board unanimously rejected the Proposal. Notwithstanding this, the Board concluded that it was appropriate to adjourn the EGM convened to approve the Trafford Centre acquisition to endeavour to ensure that CSC’s shareholders are provided with the necessary information about the Proposal to make a clear decision.
The Board advised shareholders they should be aware that there is no certainty that an offer by Simon will be made.
On 17 December 2010 the Board welcomed the announcement by the Takeover Panel, setting a deadline of 5pm on 12 January 2011 for Simon to either provide a firm offer for the entire issued and to be issued share capital of the Company under Rule 2.5 of the Takeover Code or withdraw.
As announced on 20 December 2010, the EGM convened for 12 noon was held but the only resolution proposed was an adjournment resolution which was duly passed. The adjourned EGM is convened for 4.00pm on Wednesday 26 January 2011 at One Whitehall Place, Westminster, London, SW1A 2EJ. On 21 December 2010, the Chairman wrote to all shareholders to provide the background to the adjournment.
On 7 January 2011 CSC announced revised terms for the Trafford Centre acquisition and published a Circular to shareholders setting out its view of the strong prospects for an independent CSC, why it believes the indicative proposal from Simon received on 15 December 2010 very substantially undervalues the Company and its prospects, and why shareholders should vote in favour of the Revised Acquisition.
Simon announced on 11 January 2011 that it did not intend to make an offer for the entire share capital of CSC. In its response noting Simon’s announcement, CSC continued to recommend CSC shareholders to vote in favour of the revised Trafford Centre acquisition at the EGM to be held on 26 January 2011.
Any further developments and all documentation relating to the approach by the Simon Property Group will be made available on this page.