Fresh salvos in retail group battle

THe board of Capital Shopping Centres, owner of Braehead retail complex, yesterday described a proposal by rebel shareholder Simon Group as "completely impractical" as the row between the two intensified.

The US firm, which has expressed an interest in buying Capital but was denied access to its accounts, suggested a deal that would see Capital raise cash from its shareholders to fund its controversial acquisition of the Trafford Centre in Manchester from Peel.

Capital said that Simon's proposed deal was impractical because Peel wanted to become a shareholder and remain an investor in regional shopping malls, and it urged shareholders to vote in favour of the Trafford Centre deal next Monday.

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In an open letter to Capital chairman Patrick Burgess, Simon's executive chairman, David Simon, said his company had spoken to other shareholders who shared its concerns about the bid. He added that his earlier offer to open discussions about buying Capital remained on the table.

A statement released by Capital claimed that Simon Group's proposal "does not provide a genuine alternative" for its shareholders.

The existing terms are "a compelling transaction of significant benefit to CSC shareholders", it added.

And it said it could not alter the terms of a legally binding agreement with Peel, but added it was encouraged that Simon had recognised the "strategic importance" of the Trafford Centre as a future part of its portfolio.

Shares in Capital closed up 3.5p at 393.5p.