Capital target for US group takeover

Capital Shopping Centres, which already owns Lakeside in Essex and 12 other centres in the UK, said US shareholder Simon Property Group had asked it not to proceed with the Trafford move while it prepares a potential offer for Capital.

Capital dismissed the interest and said it was pressing ahead with its plans in the absence of any sign of a firm offer from Simon, which is a major shopping mall owner in the United States.

But Capital's shares leapt 10 per cent as investors cheered news of takeover interest.

Capital confirmed its Trafford Centre plans on Wednesday and announced further details yesterday of a deal with current owner Peel Holdings, which is led by billionaire John Whittaker.

Capital is also set to launch a fundraising alongside the takeover, which involves a purchase price of 750m plus 850m of debt and other liabilities.

If the Trafford deal goes through, it would see Peel take a 19.9 per cent stake in Capital and board representation.

It would also cement Capital's position as the leading UK shopping centre group with 14 malls, including four of the country's top six out-of-town destinations.

Investors – including Simon Property Group, which owns 5.6 per cent of Capital – will have a chance to vote on the Trafford acquisition and share placing on December 20. The Trafford Centre offers 1.9 million square feet of retail, catering and leisure space.