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Johannesburg - US-based Simon Property Group said on Wednesday that it has reached agreement on the terms of the loan facility - valued at £3bn - which would enable it to make a firm offer for Capital Shopping Centres (CSC).
A consortium of banks led by Citi, Deutsche Bank, Goldman Sachs and Morgan Stanley is arranging the facility, with the documentation expected to be completed next week.
Simon said it has obtained the approval of its board for the bid and is making efforts to talk to the CSC board.
Simon, which owns a 5% stake in the UK-based CSC, has offered 425 pence per share in cash for the UK- and JSE-listed retail property group.
The CSC board rejected the offer, arguing that this was yet another attempt by Simon to frustrate its proposed acquisition of the Trafford Shopping Centre without putting forward a proper proposal for shareholders to consider.
Capital plans to buy the Manchester shopping centre for £1.6bn, which Simon opposes on the grounds that the transaction is substantially overvalued and would diminish shareholder value.
Capital is to hold an extraordinary general meeting on January 26 2011.
Simon was given until January 12 2011 by the UK's Takeover Panel to provide a firm offer or withdraw.
The Trafford Centre is regarded as one of the UK's most successful retail and leisure destinations, attracting 35 million visits annually.
In the proposed deal, CSC would acquire Trafford from the Peel Group and Peel would in turn acquire a 25% stake in CSC, which Simon is opposed to.
The acquisition involves an equity purchase price of £747.6m for the Trafford Centre, and a further amount of about £77m in respect of a cash contribution by Peel, in return for the issue of consideration shares and convertible bonds by CSC to Peel.
The Peel Group currently holds 0.3% of CSC's shares, Donald Gordon owns 13.3%, other South African investors - including Coronation Fund Managers [JSE:CML], Public Investment Corporation, Investec Asset Management, Sanlam Investment Management, Old Mutual Asset Managers and Foord Asset Management - jointly hold 28.8%, Simon Property owns 5.1% and there is a 52.4% public float.
