Op­por­tu­nity knocks

Finweek English Edition - - COMPANIES & MARKETS -

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

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