Simon Property Group has withdrawn its bid to buy Capital Shopping Centres (CSC) Group for 425p per share, or £2.9 bn (EUR 3.4 bn), the company announced on Tuesday.

In a reaction, the Board of CSC said it continues to recommend that CSC shareholders vote in favour of the revised Trafford Centre acquisition, the terms of which were announced on 7 January 2011. Earlier the board rejected Simon's advance, labelling it ast yet another attempt by Simon to frustrate the Trafford Centre acquisition without putting forward a proper proposal for CSC shareholders to consider as an alternative. SPG already hold a 5% stake in CSC.

CSC has meanwhile rescheduled an extraordinary meeting to vote on the revised acquisition on 26 January. Initially, CSC shareholders were to vote on 20 December in relation to CSC's plan to acquire the Trafford Centre in Manchester for EUR 1.9 bn in shares and debt assumption. SPG opposes the acquisition, saying it overvalues the centre and would give Peel Group, the vendor of the Trafford Centre, a 25% stake in CSC and a seat on the board without extracting a premium.

In May 2010, Liberty International demerged its non-shopping centre activities and renamed itself Capital Shopping Centres Group PLC, to enable CSC to pursue a strategy as the leading owner, manager and developer of pre-eminent UK regional shopping centres. In a statement, CSC said the revised acquisition is 'absolutely in line with this stated intention. It is a very rare opportunity to acquire 100 per cent. of a pre-eminent UK out-of-town
regional shopping centre and is expected to: strengthen CSC's position as the leading operator of pre-eminent UK regional shopping centres
and enhance the overall quality of the portfolio.'

After completing the revised acquisition, CSC will own 14 UK shopping centres, including 10 of the top 25 and four of the top six out-of-town
shopping centres.