NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
For immediate release
Simon Property Group, Inc.
December 15, 2010
This announcement is being made in accordance with Rule 2.4 of the City Code on Takeovers and Mergers (the "Code"). This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the Code. There can be no certainty that any offer will ultimately be made.
SIMON PROPERTY GROUP, INC. ("SIMON") SUBMITS INDICATIVE PROPOSAL OF 425 PENCE PER SHARE IN CASH TO CAPITAL SHOPPING CENTRES GROUP PLC ("CSC")
Simon announces that it has today sent a letter, the text of which is set out below, to the Board of CSC. The letter contains the terms of an indicative proposal of 425 pence per share in cash for the shares of CSC's other shareholders.
The letter does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the Code. There can be no certainty that any offer will ultimately be made.
LETTER TO THE BOARD OF CSC
December 15, 2010
The Board of Directors
Capital Shopping Centres Group PLC
Indicative offer for Capital Shopping Centres Group PLC ("CSC")
I am writing to propose a transaction in which Simon Property Group, Inc. ("Simon") would offer CSC's other shareholders 425 pence in cash per ordinary share.
Our interest in making an offer for CSC is, of course, not new. By making this offer on the terms outlined in this letter, we are confident that we have now answered any objections you have previously expressed. We believe that we should work together to announce a recommended offer, and would urge you to listen to calls from your shareholders - many of whom we have spoken to - opposing the Trafford Centre transaction or asking you to adjourn your forthcoming EGM.
Benefits of our proposal
We believe that our proposal provides a full and fair premium valuation to CSC shareholders. A cash offer of 425 pence per CSC share would represent:
· a premium of 26% to CSC's closing share price of 337 pence immediately prior to the commencement of the offer period on November 24, 2010;
· a premium of 21% to CSC's average daily closing price over the 6 month period prior to commencement of the offer period on November 24, 2010;
· a premium of 16% to the blended share price of 367 pence at which CSC is proposing to issue 25% of the company's shares to Peel to fund the acquisition of the Trafford Centre;
· a premium of 13% to CSC's diluted NAV per share of 377 pence as of November 1, 2010; and
· a premium of 7% to CSC's closing share price of 396 pence on December 14, 2010, the day before the date of this letter.
Simon is an S&P 500 company with an equity market capitalisation of approximately US$34 billion. We have completed real estate acquisitions with an aggregate value of US$28 billion. We are finalising a bridge loan facility with our bankers of approximately £3 billion for the purposes of this transaction. We are confident that, subject to successful completion of due diligence, we will be able to obtain sufficient resources to satisfy our proposal in full.
The announcement of a firm offer under Rule 2.5 of The City Code on Takeovers and Mergers ("The City Code") would be subject to the following pre-conditions (none of which we will waive):
· the proposed acquisition of the Trafford Centre Group not having been completed;
· final approval from the board of Simon; and
· access to satisfactory due diligence.
Any formal offer would also be subject to the normal terms and conditions appropriate to an offer under The City Code.
We reserve the right to announce a firm offer under Rule 2.5 of The City Code (i) at less than 425 pence per CSC share (a) if the directors of CSC agree or (b) by an amount of up to any dividend declared, made or paid after the date of this letter; and/or (ii) including (an) alternative form(s) of consideration.
We have appointed Citi, Lazard and Evercore as our financial advisers and Freshfields and Wachtell Lipton as our legal advisers.
Status and announcement
This letter, and any non-contractual obligation arising from or relating to it, is governed by and construed in accordance with English law, and is not intended to be legally binding and shall not give rise to any legal consequences in any respect. We must emphasise that this letter does not constitute an offer (or impose any obligation to make an offer) nor does it evidence a firm intention on our part to make a formal offer for CSC for the purposes of Rule 2.2(a) of The City Code or otherwise and we reserve the right to terminate our interest in CSC immediately at any stage and without reason.
We shall be publicly announcing the contents of this letter.
We believe that our proposed offer is highly favourable and attractive to CSC shareholders. We are enthusiastic about this opportunity and committed to dedicating substantial time and financial resources with a view to concluding a transaction as soon as possible.
If you need any further clarification, please do not hesitate to contact me or our financial advisers.
Chairman of the Board and Chief Executive Officer
Shelly Doran (Investors) Telephone: +1 317 685 7330
Les Morris (Media) Telephone: +1 317 263 7711
Citi Telephone: +44 (0) 20 7986 4000
(Financial adviser to Simon)
Lazard Telephone: +44 (0) 20 7187 2000 (Financial adviser to Simon)
Evercore Telephone: +44 (0) 20 7268 2702
(Financial adviser to Simon)
Citigate Dewe Rogerson Telephone: +44 (0) 20 7638 9571
(UK media adviser to Simon)
Sard Verbinnen & Co Telephone: +1 212 687 8080
(US media adviser to Simon)
Citi, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Simon and no one else in relation to the matters referred to in this announcement and will not be responsible to anyone other than Simon for providing the protections afforded to customers of Citi or for providing advice in relation to the contents of this announcement.
Lazard & Co., which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Simon and no one else in relation to the matters referred to in this announcement, and will not be responsible to anyone other than Simon for providing the protections afforded to customers of Lazard & Co. or for providing advice in relation to the contents of this announcement.
Evercore Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Simon and no one else in relation to the matters referred to in this announcement and will not be responsible to anyone other than Simon for providing the protections afforded to customers of Evercore Partners or for providing advice in relation to the contents of this announcement.
Forward looking statements
This announcement contains certain "forward looking statements". These statements are based on the current expectations of the management of Simon and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on CSC, the expected timing and scope of the Acquisition, and other statements other than historical facts.
Forward-looking statements include statements typically containing words such as "will", "may", "should", "believe", "intends", "expects", "anticipates", "targets", "estimates" and words of similar import. Although Simon believes that the expectations reflected in such forward-looking statements are reasonable, Simon can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements. These factors include: local and global political and economic conditions; changes in UK real estate market conditions and valuations; competitors' actions; foreign exchange rate fluctuations and interest rate fluctuations (including those from any potential credit rating decline); legal or regulatory developments and changes; the outcome of any litigation; the impact of any acquisitions or similar transactions; success of business and operating initiatives; and changes in the level of capital investment. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Neither Simon nor any of its affiliated companies undertakes any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel' s Market Surveillance Unit on +44 (0)20 7638 0129.