Capital in talks to buy Trafford Centre

If the deal went ahead, Peel Group would receive 750m worth of shares in CSC, the latter taking on 850m of Peel Group debt, CSC said yesterday.

Any deal would be conditional on CSC undertaking an equity placing of up to 9.9 per cent of its existing share capital, with Peel Group – the investment vehicle of English billionaire John Whittaker – contributing 75m towards this.

CSC would use the placing's proceeds to improve its overall financial flexibility, reduce its loan-to-value ratio to 40-50 per cent, and to fund certain items arising from the Trafford Centre acquisition.

As a result, Peel Group would hold a stake of about 19.9 per cent in CSC, overtaking South African entrepreneur Donald Gordon as the company's largest shareholder.

The 1.9 million-square-foot Trafford Centre draws about 35 million customers a year. Its acquisition would mean CSC owns four of the top six out-of-town shopping centres.

Brokerage Panmure Gordon repeated its 'sell' rating on CSC stock, citing concerns over the 2011 retail environment.