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CSC cuts Trafford offer to thwart Simon bid

London - Capital Shopping Centres (CSC) cut the price it is offering for the Trafford Centre by 8%, boosting the British mall owner's defence against US peer Simon Property's $4.5 bn approach.

CSC, Britain's largest mall owner, said on Friday it would issue 205.9 million new shares to Trafford Centre owner Peel Group, down from the 224.1 million previously agreed.

Peel accepted the new terms which valued the deal at £863m, based on CSC's close at 419.1 pence on Thursday. That was above the 400p the two sides agreed to value the new CSC shares at, up from an earlier 368p.

"The repricing of this transaction reflects my strong belief in the growth yet to come at CSC," said John Whittaker, Peel Group's billionaire head.

CSC is attempting to fend off Simon's 425p/share offer for its business, a bid that came after CSC launched its move to buy the Trafford Centre.

Simon's 5.1% stake in CSC would be diluted by the Peel deal, which it opposes.

Simon, the biggest US mall owner, must formalise its bid by Wednesday under English takeover law.

CSC said its net asset value - a value gauge commonly used by real estate investment trusts (REITs) - could be as high as 625p/share, and the revised acquisition alone implied a net asset value as high as 536p.

"There is now no scope for a recommended offer from Simon emerging before the put up or shut up deadline of January 12," said Micheal Burt at Execution Noble, a stockbroker.

Simon has to move close to 500p for a more realistic offer, Burt said. CSC shares were down 0.2% in afternoon trade.

Simon was not available for comment.

Simon has said it would not buy CSC if the Trafford deal went through. After Simon urged CSC shareholders to oppose the deal at a meeting scheduled for December 20, CSC moved the date to January 26, saying it needed more time to inform shareholders.

Simon's third attempt to acquire CSC comes as real estate investors have been showing a renewed interest in British malls, which they expect to rise in value as the local economy stages a tentative recovery.

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