| Wed 24 Nov 2010, 9:12 | | CSO - Capital Shopping Centres Group Plc - Capital Shopping Centres Group Plc |
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CSO
CSO
CSO - Capital Shopping Centres Group Plc - Capital Shopping Centres Group Plc
Response to Press Comment
CAPITAL SHOPPING CENTRES GROUP PLC
(Registration number UK3685527)
ISIN Code:GB0006834344
JSE Code: CSO
24 November 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.
CAPITAL SHOPPING CENTRES GROUP PLC
RESPONSE TO PRESS COMMENT
Capital Shopping Centres Group PLC (the "Company" or "CSC") notes the press
comment relating to the potential acquisition by CSC of 100 per cent. of the
Trafford Centre (the "Acquisition") which currently forms part of the Peel
Group.
CSC confirms that it is in advanced discussions with Peel in respect of the
Acquisition.
If the Acquisition were to be announced, it would involve an equity purchase
price of approximately GBP750 million for the Trafford Centre and a further
amount of approximately GBP75 million in respect of a cash contribution by Peel,
in return for the issue of new ordinary shares and convertible bonds by CSC to
Peel. On the basis of CSC`s 30 June 2010 net asset value per share of 368 pence,
the Acquisition would imply a price for The Trafford Centre of approximately
GBP1.60 billion, taking into account associated net debt of approximately GBP800
million, which mostly comprises long-dated amortising CMBS notes, and other net
liabilities of approximately GBP50 million.
CSC is also contemplating an equity placing (the "Placing") of up to 9.9 per
cent. of the Company`s existing issued share capital to increase CSC`s overall
financial flexibility, to reduce the Company`s loan to value ratio to within the
CSC Board`s stated desired range of 40 to 50 per cent., and to fund certain
items arising as a result of the Acquisition including the repayment of short-
term debt of the Trafford Centre, following which CSC`s headroom in terms of
cash and committed facilities would amount to approximately GBP350 million. The
Acquisition would be conditional on the Placing.
It is anticipated that upon completion of the Acquisition, Peel would hold
approximately 19.9 per cent. of the enlarged Company (and approximately 24.9 per
cent. assuming conversion of the convertible bonds). John Whittaker, Chairman of
Peel, would also join the CSC Board as a Non-Executive Director and Deputy
Chairman.
The Trafford Centre, located near Manchester, is one of the UK`s most successful
retail and leisure destinations attracting 35 million customer visits annually,
with 1.9 million sq. ft. of retail, catering and leisure space, including
approximately 0.2 million sq. ft. at Barton Square, a major homeware and leisure
extension.
The Acquisition would strengthen CSC`s position as the leading operator of pre-
eminent UK regional shopping centres. Post the Acquisition, CSC would own
fourteen UK shopping centres, including ten of the top 25 and four of the top
six out-of-town centres.
The Trafford Centre`s property assets are being externally valued as at 1
November 2010 and are expected to show a valuation of GBP1.65 billion, which
would represent (excluding Barton Square) a net initial yield of 5.01 per cent.
and a nominal equivalent yield of 5.58 per cent. The implied Acquisition price
would represent a 3 per cent. discount to this external valuation.
CSC has revalued its property assets as at 1 November 2010 showing an increase
of 1.2 per cent. between 30 June 2010 and 1 November 2010, equivalent to an
increase in net asset value of 9 pence per share.
It is expected that the Acquisition and the Placing would have a neutral impact
on earnings per share in the first full year and on net asset value per share.
The Acquisition would constitute a Class 1 transaction for the purposes of the
Listing Rules and would therefore require the approval of CSC shareholders at an
Extraordinary General Meeting. If the Acquisition is agreed, it is anticipated
that CSC would post a combined prospectus and circular in connection with the
proposed Acquisition to CSC shareholders in due course.
CSC intends to appoint Merrill Lynch International and UBS Limited as joint
bookrunners in connection with the potential Placing.
Merrill Lynch is acting as financial adviser to CSC in connection with the
potential Acquisition and UBS is also providing financial advice to the Company.
There can be no certainty that any final agreement in relation to the
Acquisition will ultimately be reached or that either the Acquisition or the
Placing will ultimately proceed.
A further announcement will be made in due course.
ENQUIRIES:
Capital Shopping Centres Group PLC:
David Fischel (Chief Executive) +44 (0)20 7960 1207
Matthew Roberts (Finance Director) +44 (0)20 7960 1353
Kate Bowyer
Investor Relations +44 (0)20 7960 1250
BofA Merrill Lynch: +44 (0)20 7628 1000
Simon Mackenzie-Smith
Simon Fraser
UBS Investment Bank: +44 (0)20 7567 8000
Hew Glyn Davies
Jonathan Bewes
Hudson Sandler (UK Public Relations)+44 (0)20 7796 4133
Michael Sandler
Wendy Baker
College Hill Associates
(SA Public Relations) +27 (0)11 447 3030
Nicholas Williams
Sponsor:
Merrill Lynch SA (Pty) Limited
Merrill Lynch International, which is authorised and regulated in the United
Kingdom by the FSA, and Merrill Lynch South Africa, which is a registered
sponsor and member of the JSE, are acting exclusively for CSC and no one else in
connection with the potential Acquisition and Placing and will not regard any
other person (whether or not a recipient of this document) as a client in
relation to the potential Acquisition and Placing and will not be responsible to
anyone other than CSC for providing the protections afforded to its clients or
for providing advice in relation to the potential Acquisition and Placing.
UBS Limited is acting exclusively for CSC and no one else in connection with the
potential Acquisition and Placing and will not regard any other person (whether
or not a recipient of this document) as a client in relation to the potential
Acquisition and Placing and will not be responsible to anyone other than CSC for
providing the protections afforded to its clients or for providing advice in
relation to the potential Acquisition and Placing.
This Announcement is an advertisement and not a prospectus. There can be no
certainty that any final agreement in relation to the Acquisition will
ultimately be reached or that either the Acquisition or the Placing will
ultimately proceed. A further announcement will be made in due course. If the
Acquisition does proceed a combined prospectus and circular will be published in
connection with the Acquisition and the admission of the shares being issued by
the Company in connection with the Placing and Acquisition.
Neither the content of the Company`s website nor any website accessible by
hyperlinks to the Company`s website is incorporated in, or forms part of, this
Announcement. The distribution of this Announcement and any other documentation
associated with the Acquisition and Placing into jurisdictions other than the
United Kingdom may be restricted by law. Persons into whose possession these
documents come should inform themselves about and observe any such restrictions.
Any failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction. In particular, such documents should
not be distributed, forwarded to or transmitted, directly or indirectly, in
whole or in part, in or into Australia or Canada or Japan or the United States.
These materials do not constitute or form a part of any offer or solicitation to
purchase or subscribe for securities in the United States or in any other
jurisdiction in which such offer or solicitation is unlawful. No action has been
taken by the Company that would permit an offer of the Placing Shares or
possession or distribution of this Announcement or any other offering or
publicity material in any jurisdiction where action for that purpose is
required, other than in the United Kingdom.
The securities mentioned herein have not been and will not be registered under
the US Securities Act of 1933 (the "US Securities Act") or under any securities
laws of any State or other jurisdiction of the United States and may not be
offered, sold, resold, transferred or delivered, directly or indirectly, within
the United States except pursuant to an applicable exemption from the
registration requirements of the US Securities Act and in compliance with the
securities laws of any State or other jurisdiction of the United States. There
will be no public offer of the securities mentioned herein in the United States.
This Announcement may not be released, published or distributed, directly or
indirectly, in whole or in part, in or into the United States.
No statement in this Announcement is intended to be a profit forecast and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future financial years would necessarily
match or exceed the historical published earnings per share of the Company.
This document contains or incorporates by reference "forward-looking
statements", within the meaning of Section 27A of the US Securities Act and
Section 21E of the US Exchange Act of 1934, regarding the belief or current
expectations of the Company, its Directors and other members of its Senior
Management about the Company`s businesses and the transactions described in this
document, including statements relating to possible future write-downs and its
capital planning projections. Generally, words such as "may", "could", "will",
"expect", "intend", "estimate", "anticipate", "believe", "plan", "seek",
"continue" or similar expressions identify forward-looking statements.
These forward-looking statements are not guarantees of future performance.
Rather, they are based on current views and assumptions and involve known and
unknown risks, uncertainties and other factors, many of which are outside the
control of the Company and are difficult to predict, that may cause actual
results to differ materially from any future results or developments expressed
or implied from the forward-looking statements.
These forward-looking statements speak only as at the date of this document.
Except as required by the FSA, the London Stock Exchange, the Johannesburg Stock
Exchange, the Part VI Rules or applicable law, CSC does not have any obligation
to update or revise publicly any forward-looking statement, whether as a result
of new information, further events or otherwise. Except as required by the FSA,
the London Stock Exchange, the Johannesburg Stock Exchange, the Part VI Rules or
applicable law, CSC expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement contained
herein to reflect any change in CSC`s expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
The contents of this Announcement are not to be construed as legal, financial,
business or tax advice.
Date: 24/11/2010 09:12:50 Produced by the JSE SENS Department.
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