Simon urges CSC to look at new financing for Trafford Centre

Simon Property Group has urged Capital Shopping Centres Group to look at an alternative financing proposal for the acquisition of the Trafford Centre.

Simon considers this proposal to be more attractive for CSC shareholders than the transaction which the board has recommended that shareholders support at the extraordinary general meeting on 20 December.

A letter to the CSC board says: "You are currently proposing to issue up to 224.1 million new ordinary shares on a fully diluted basis, 20.9 million of which will be issued at 355p per share, and 203.2 million shares issued at 368p per share, or a blended share price of 367p.

"This represents a 2.7% discount to NAV per share of 377p.

"As a more attractive and less dilutive alternative, we would be prepared to subscribe, subject to a clawback, for fully diluted issue of 205.5 million new ordinary shares at a price of 400p per share, representing a 9.0% premium to Peel's blended share price of 367p per share, as well as a 6.1% premium to NAV.

"The issue would comprise 153.3 million new ordinary shares, together with £ 209 million of convertible bonds (the same amount as would be issued to Peel), convertible into 52.2 million ordinary shares, for which we would be prepared to accept the same coupon as Peel despite the higher conversion price of 400p.

"Our proposal entails a cash placing to Simon at a price that reflects a substantial premium to the terms of the existing Peel transaction and is much less dilutive to existing shareholders."

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