Trafford Centre set for £1.6bn sale to CSC group
Thursday 25 November 2010
One of the UK's biggest shopping centre is in "advanced discussions" over a £1.6bn sale to a retail property group, marking another milestone for its billionaire owner, John Whittaker.
Capital Shopping Centres (CSC) yesterday confirmed it was in talks with Peel Group to acquire the Trafford Centre near Manchester. Under the terms of the deal, Lancashire-born Mr Whittaker, the chairman of Peel Group, would become CSC's biggest shareholder with 19.9 per cent.
The transaction would be another landmark in an eventful year for CSC, which owns 13 shopping centres including the Arndale, also in Manchester, and Lakeside in Essex.
CSC was established in May when the real-estate investment trust Liberty International split in two, which also led to the formation Capital & Counties Properties, the London specialist. If the deal goes ahead, CSC will fund it with £750m in shares for the Trafford Centre, which covers 1.9m square feet of retail space, and a further £75m cash contribution by Peel in return for it receiving new shares and convertible bonds.
CSC values the Trafford Centre's property assets at £1.65bn, including net debt of £750m and other liabilities of £50m. This implies a net initial yield of 5.01 per cent. The proposed acquisition price would represent a 3 per cent discount to this external valuation. Mr Whittaker will join the listed retail property developer's board as a non-executive deputy chairman.
His shareholding would rise to 24.9 per cent if he converted the convertible bonds that would form part of the deal. CSC confirmed it was in "advanced discussions with Peel in respect of the acquisition", but said "there can be no certainty that any final agreement" would be reached.
The company said it was also considering a placing of 9.9 per cent of its shares to raise funds and increase its "overall financial flexibility" and reduce its loan to value ratio to between 40 per cent and 50 per cent. Following the acquisition, CSC would hold four of the UK's top six out-of-town shopping centres.
The Trafford Centre, which opened in 1998, attracts 35 million visitors a year. It houses 230 shops, including Selfridges and Marks & Spencer, as well as 60 restaurants and bars. When the Trafford Centre finally opened after 27 months of construction, Mr Whittaker – who is worth $1.6bn, according to Forbes – abseiled into the building.
For Mr Whittaker – whose family hold 73 per cent of the Peel Group – the proposed deal with CSC is the latest in a meteoric career. The Peel Group's empire includes Peel Ports and Peel Airports, which holds stakes in three airports close to Liverpool, Durham and Sheffield.
Mr Whittaker made his mark in the 1970s when he started acquiring industrial firms on profitable land. Since he took Peel private in 2004, he has also invested in industries, including sustainable energy, hotels and utilities.
- 2 Moscow voted the world's unfriendliest city
- 3 The excuses your boss is most likely to believe when you call in sick
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Bono's group has made more money from Facebook investment than from all his music
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...