The leading real estate firm in the United States has been rejected after it unveiled plans to bid for the owner of the Lakeside and Metro shopping centres – in a move valuing the company at £2.9 billion.

Simon Property Group (SPG), based in Indianapolis, made an offer for Capital Shopping Centres (CSC), which it has a five per cent stake in, on the basis that the UK firm pulled out of a controversial acquisition of Manchester's Trafford Centre.

SPG, which proposed a 425p a share takeover, with the condition that the proposed purchase of the shopping centre does not go ahead, were turned down after “careful consideration” by CSC – reported the Press Association.

CSC has been locked in a bitter battle with SPC since it offered £1.6 billion to buy the Trafford Centre from Peel Holdings, giving the company controlled by John Whittaker nearly 20 per cent of its shares.

In an open letter to CSC, David Simon, chief executive of SPG, said: “We believe our proposed offer is highly favourable and attractive to CSC shareholders. We are enthusiastic about this opportunity and committed to dedicating substantial time and financial resources with a view to concluding a transaction as soon as possible.”

The move has put pressure on CSC shareholders ahead of their general meeting, at which a vote on the Trafford proposal and share placing will be held.

The primary shareholder wanted the buy to be put on hold while it looked at a possible takeover bid, but so far the British company has given its pursuer little attention in the absence of any firm offer.

CSC believes buying the Manchester shopping centre will cement its position as the leading UK shopping centre group – currently with 14 centres – and this bid was an attempt to “frustrate” plans

The company said that SPG’s 425p a share offer price “substantially undervalues” CSC, which has an “unrivalled portfolio of regional shopping centres, built up over 30 years”.

By Shelley DeBere