Property giants' spat grows

Simon Property Group has accused Capital Shopping Centres (CSC) of "wishful thinking" after the UK's largest owner of shopping malls attempted to value itself at a hefty £4.3 billion.

US suitor Simon, which has indicated it is willing to pay some 2.9bn for CSC, also said that it would continue to oppose the British firm's purchase of Manchester's Trafford Centre from the mall's owner, Peel Group.

In a statement released in the final hour of trading in London, Simon said the revised purchase terms announced earlier in the day still failed to address "fundamental concerns" about the deal.

The US group then picked holes in the "potential net asset value" of 625p per share that CSC - whose assets include major centres at Braehead, near Glasgow, and Gateshead - revealed to the market earlier in the day, saying the assumptions made to arrive at that figure represented wishful thinking.

Simon questioned CSC's conviction over the 625p level, noting that shares to be issued to Peel to pay for the Trafford Centre would be issued at the far lower price of 400p each.

"If the CSC board really believes in 'potential net asset value of up to 625p', why are they proposing to issue 33 per cent of the company's existing shares to Peel at a price of 400p, thereby diluting existing shareholders," the US property group queried.

CSC agreed in late November to buy the Trafford Centre from John Whittaker's Peel Group, a move that sparked Simon into making its indicative offer of 425p-a-share for CSC. Simon, which owns more than 5 per cent of CSC's shares, has said it will not make a formal offer if the deal for the Trafford Centre goes through.

Simon is loath to see its stake diluted in the share-fuelled deal between CSC and Peel.