EventCity at centre of Trafford Centre bidding war

The owner of Manchester’s EventCity is expected to secure a
controlling stake in retail property developer, Capital Shopping Centres (CSC),
after its rival withdrew a competing bid on 11
January.

CN broke the story back in
November of the EventCity opening of a new
25,000sqm events space
 in a former Argos warehouse near to the
Trafford Centre.

The Peel Group was vying against retail
property developer US-based Simon Property Group for control of CSC, which owns
14 retail complexes across the UK. The battle for shareholder
command was triggered by Peel’s £1.6bn all-share bid handing over its Trafford
Centre complex in Manchester to CSC in return for a controlling
stake in its operations.

Simon Property Group, a 5.1 per cent minority
CSC shareholder, had urged other investors to reject the bid, claiming it
undervalued CSC and countered with an offer in December to buy all CSC shares at
425 pence per share, or £2.9bn.

Merrill Lynch and UBS, acting for CSC,
subsequently valued the shares 50p higher.

Simon Property Group officially attributed
the withdrawal of its offer to CSC’s refusal to open its books for due
diligence.

During an extraordinary general
meeting (EGM) on 15 December, CSC’s
board dismissed Simon Property Group’s proposal but recommended the Trafford acquisition.

“The
Board of CSC believes that this [£2.9bn bid] is yet another 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
unanimously rejects the Proposal,” the company stated in its December letter to
shareholders.

On 7 January, Peel submitted an amended acquisition proposal to CSC
giving CSC
100 per cent ownership of the Trafford Centre and a multi-million dollar cash
injection in return for a 23.2 per cent company stake. This deal valued the
shares at 400 pence each, up from the original deal, first tabled in November,
which would have given Peel a 24.7 per cent stake with shares valued at 368
pence apiece.

The Trafford Centre was valued at £1.65bn on
1 November 2010 by external advisors and, should the latest offer of a tie-up
get the final sign-off from CSC shareholders, Peel founder and owner John
Whittaker will become the company’s
deputy chair and a non-executive director.

Got a business or City story for Conference
News? Contact: pcolston@mashmedia.net

Paul Colston

Author

Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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