CSC tweaks Peel’s stake in Trafford Centre deal
Capital Shopping Centres Group and Peel Group have agreed a revised provisional deal to sell the Trafford Centre.
The joint statement released today said Peel's shareholding in CSC post completion would be reduced from 24.7% to 23.2% assuming conversion of the convertible bonds. This reflects a re-pricing of the CSC shares issued to Peel from 368p to 400p.
In addition, Peel will be restricted from acquiring further shares in CSC that would increase its aggregate shareholding in CSC beyond 24.9% for a period of three years from completion.
As at 1 November 2010, the Trafford Centre was independently valued at £1.65bn. The effect of the adjusted pricing outlined above will be to increase CSC's pro forma net asset value (NAV) by 7p a share excluding the value of retained profits since 30 June 2010.
CSC said its value could rise to 625p a share, valuing the company at £4.2bn, significantly higher than rival Simon Property Group's indicative 425p/share bid.
John Whittaker, chairman of Peel, said: "CSC has 13 prime UK shopping centres with considerable untapped growth opportunities. I believe the existing NAV of CSC does not reflect the latent value that can be unlocked through, amongst other things, improving rental income, increasing square footage and adding leisure, catering and focus on customer ambience. The re-pricing of this transaction reflects my strong belief in the growth yet to come at CSC. By combining the extensive experience of the Peel and CSC teams in managing UK regional shopping centres we believe CSC will be well placed to realise this potential.
"The Trafford Centre is an outstanding retail and leisure destination in its own right. Its mix of retail, entertainment, theatre, leisure and sporting facilities has driven significant year-on-year growth in footfall which has led to substantial value out-performance. This successful formula applied to CSC's portfolio will provide a unique platform for growth for the benefit of all CSC shareholders."
