John Whittaker is keeping his cards close to his chest. But then he always does. It’s a well-practised tactic that has helped the 68-year-old to a £1bn-plus fortune.
Even his advisers were tight-lipped after this week’s announcement by Whittaker’s Peel Group that it was to sell the Trafford Centre to Capital Shopping Centres for £1.6bn.
But that reticence wasn’t enough to stop tongues wagging in a market a little light on gossip as it enters the final weeks of an eventful year.
After all, it’s a deal that has the potential to be transformational for CSC, which appears determined to do all it can to shed its image as the boring part following its demerger from Liberty International.
The Trafford deal would see an equity purchase of £750m based on CSC’s June 2010 net asset value of 368p, the assumption of net debt of around £800m and other net liabilities of around £50m.
In addition, Peel will make a further cash contribution of £77m in exchange for new shares and CSC’s convertible bonds.
In return, Whittaker himself would own as much as 25% of CSC and join CSC’s board as deputy chairman.
But what looked like a simple deal on Wednesday – albeit one that threw up all sorts of questions – took a much more interesting turn on Thursday morning when US-based Simon Property Group attempted to muscle in (page 38).
Simon, a 5.6% shareholder in CSC and, with an £18bn market cap, one of the largest real estate investors in the world, asked the company to halt proceedings so it could consider a potential takeover approach. It said the offer would be made at an “unspecified premium” to the company’s NAV.
The word premium was not enough to seduce CSC, which dismissed the approach, saying Simon had provided no certainty that an offer would be made. An extraordinary general meeting is scheduled for 20 December.
Does this all sound familiar? After all, it’s a tale that boasts a fabulously wealthy investor, a dispute between the executive and a sizeable shareholder, and a looming EGM with the potential for fireworks. A little Minerva-like, perhaps.
But as Natie Kirsh found with Minerva, the odds are stacked against Simon. Its comparatively small stake in CSC gives it little room for manoeuvre.
After the Trafford Centre deal, CSC will have a market cap of around £3bn, so any acquisition would require a big commitment. CSC does not believe a due diligence process has been started, so with the US Thanksgiving holiday upon us, time is also against it.
Simon will also struggle to win support among CSC’s historically dominant South African and international investors – unless, of course, its premium can be pitched at a seductive level.
What’s more, those who know Whittaker say he is not easily deterred. He has quietly amassed a business empire that, as well as the Trafford Centre – one of the largest
It’s going to be another interesting ride.
• If you wanted evidence that property has shed its unwillingness to be seen to be celebrating, Monday night’s EG Awards provided it . There was glamour in the form of host Fiona Bruce (pictured below) and comedy from rapid-fire wit and co-host Tim Vine. And there was a real buzz in the ballroom at
damian.wild@estatesgazette.com
