Simon Property said Tuesday that it was
dropping its offer to acquire Capital Shopping
Centres after CSC, a British mall owner, refused to
allow it to conduct due diligence, and persisted in
a side deal that Simon deems harmful to
shareholders.
The collapse of the offer marks the second time in
a year that Simon, the largest operator of malls in
America, has seen its deal hopes crushed. Its
takeover bid for General Growth, a smaller
American rival, was rejected last year when the
latter chose to remain independent.
“The CSC board has refused to share any due
diligence information with Simon,” the company
said, without which a firmer bid could not be
made. In addition, Simon “continues to oppose
the value-destructive Trafford Centre transaction
and urges its fellow CSC shareholders to vote
against it. ”
Simon was offering 425 pence per CSC share,
valuing the company at £2.9 billion, well below
what the British company ’s board demanded.
“The CSC’s board’s belief in ‘potential net asset
value of up to 625p [per CSC share]’ represents,
in Simon’s view, wishful thinking and was
designed to frustrate Simon’s offer,” the
American company said.
CSC shares fell 14.4 pence, or 3.67 percent, to
378.1 pence in London on Simon ’s
announcement.
CSC has forged ahead with a £1.6 billion bid for
the Trafford Centre, a mall in Manchester, even
after Simon asked it to discard the transaction and
consider its own offer. The acquisition of Trafford
appears to have priced CSC out of the range
Simon is willing to pay.
Dropping the bid means that Simon will be
prohibited, under British law, from making
another bid for six months — and the likelihood
of a second bid will largely depend on whether or
not shareholders approve the Trafford
transaction.
The CSC board has approved the £747.6 million
($1.16 billion) deal for Trafford already, and it will
be put to a shareholder vote on January 26.
Simon, which owns 5.11 percent of CSC, has
urged its fellow shareholders to vote it down.
If shareholders approve the all-stock deal, Peel
Group, which owns Trafford, could end up with
24.9 percent of CSC. That, alongside the holdings
of the Gordon family of South Africa, would
effectively give opponents to the Simon offer a
blocking share.
Source: Http://dealbook.nytimes.com/2011/01/11/simon-withdraws-4-5-billion-offer-for-csc/
dropping its offer to acquire Capital Shopping
Centres after CSC, a British mall owner, refused to
allow it to conduct due diligence, and persisted in
a side deal that Simon deems harmful to
shareholders.
The collapse of the offer marks the second time in
a year that Simon, the largest operator of malls in
America, has seen its deal hopes crushed. Its
takeover bid for General Growth, a smaller
American rival, was rejected last year when the
latter chose to remain independent.
“The CSC board has refused to share any due
diligence information with Simon,” the company
said, without which a firmer bid could not be
made. In addition, Simon “continues to oppose
the value-destructive Trafford Centre transaction
and urges its fellow CSC shareholders to vote
against it. ”
Simon was offering 425 pence per CSC share,
valuing the company at £2.9 billion, well below
what the British company ’s board demanded.
“The CSC’s board’s belief in ‘potential net asset
value of up to 625p [per CSC share]’ represents,
in Simon’s view, wishful thinking and was
designed to frustrate Simon’s offer,” the
American company said.
CSC shares fell 14.4 pence, or 3.67 percent, to
378.1 pence in London on Simon ’s
announcement.
CSC has forged ahead with a £1.6 billion bid for
the Trafford Centre, a mall in Manchester, even
after Simon asked it to discard the transaction and
consider its own offer. The acquisition of Trafford
appears to have priced CSC out of the range
Simon is willing to pay.
Dropping the bid means that Simon will be
prohibited, under British law, from making
another bid for six months — and the likelihood
of a second bid will largely depend on whether or
not shareholders approve the Trafford
transaction.
The CSC board has approved the £747.6 million
($1.16 billion) deal for Trafford already, and it will
be put to a shareholder vote on January 26.
Simon, which owns 5.11 percent of CSC, has
urged its fellow shareholders to vote it down.
If shareholders approve the all-stock deal, Peel
Group, which owns Trafford, could end up with
24.9 percent of CSC. That, alongside the holdings
of the Gordon family of South Africa, would
effectively give opponents to the Simon offer a
blocking share.
Source: Http://dealbook.nytimes.com/2011/01/11/simon-withdraws-4-5-billion-offer-for-csc/
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