Simon agrees £3bn loan facility

Simon Property Group announced on December 29 it had reached agreement on the financial terms of a £3bn loan facility which would enable the US property group to proceed with a bid for the UK’s Capital Shopping Centres (CSC). A consortium of banks led by Citi, Deutsche Bank, Goldman Sachs and Morgan Stanley arranged the loan facility.

Simon has secured the approval of its board for a firm offer of 425p a share and is continuing its efforts to seek engagement with the board of CSC. However, analysts believe this is unlikely and suggest Simon would need to offer at least 450p a share to get any interest. The Office of Fair Trading has issued Simon with a “put up or shut up” deadline of January 12.

CSC owns 13 regional shopping centres comprising 14.1m sq ft valued at £4.9bn as of the end of June 2010. The assets comprise four major out-of-town centres – Lakeside, Thurrock; Metrocentre, Gateshead; Braehead, Glasgow and The Mall at Cribbs Causeway, Bristol; and nine in-town centres including prime destinations in Cardiff, Manchester, Newcastle, Norwich and Nottingham.