SHARES IN Capital Shopping Centres (CSC), the JSE-and London-listed owner of some of Britain’s most prestigious retail properties, have come under siege over recent weeks amid a barrage of public activism led by United States shareholder Simon Property Group. CSC is one of the new listings on the JSE to emerge from last year’s unbundling of Donald Gordon’s Liberty International. The group’s remaining assets, predominantly prime office sites, are listed separately as Capital and Counties.
The CSC share is down more than 10% from its early new year high north of 4400c to the time of writing, offering opportunistic investors an interesting buying option. The criticism by 5% shareholder Simon has arguably led to a revaluation of CSC’s proposed Trafford Centre transaction. It’s a deal the Americans say remains overpriced and will give Trafford owners Peel Group, which stands to acquire 23,2% of CSC through this deal, too much say over its future. CSC announced early in January it would issue 18m fewer shares at a higher price of 400p to cover the cost of the acquisition.
CEO David Fischel described the new offer – which sees Peel Group’s stake as a result of the deal cut from 24,7% to 23,2% – as a better deal for shareholders. He downplayed the significance of Simon’s opposition in the group’s new offer. Rather, he said, the reworking of the numbers was due to changing circumstances in global property markets since the offer was first mooted late last year.
The share price slide came as Simon withdrew its cheeky mid-December offer of 425p/share, arguing it wasn’t being allowed to conduct a due diligence investigation that would enable it to formalise an offer. That offer had been due to expire on Wednesday 12 January and the withdrawal the day before cut-off came after CSC recently sent a circular to shareholders in which it spelled out a “potential NAV” of 625p. Simon – which describes the valuation as “wishful thinking” – is now prohibited under English