CSC rejects Simon proposal and adjourns EGM

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

CAPITAL SHOPPING CENTRES GROUP PLC

15 December 2010

CSC rejects Simon Proposal and adjourns Trafford Centre EGM

Capital Shopping Centres Group PLC ("CSC" or the "Company") notes the announcement earlier today by Simon Property Group, Inc. ("Simon") concerning an indicative proposal for the Company at 425 pence per share (inclusive of the expected final dividend of 10 pence per share which was reaffirmed in the recent Prospectus sent to shareholders), conditional, among other things, on the acquisition of the Trafford Centre not proceeding (the "Proposal").

The Board of CSC believes that this is 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, and accordingly unanimously rejects the Proposal. Notwithstanding this, the Board has concluded that it is appropriate to adjourn the EGM to endeavour to ensure that CSC's shareholders are provided with the necessary information about the Proposal to make a clear decision.

The Board of CSC considers that Simon's Proposal is inadequate as:

·; 425 pence (including the CSC expected final dividend of 10p per share) very substantially undervalues the Company and its prospects. CSC owns an irreplaceable and unrivalled portfolio of regional shopping centres, built up over 30 years, that is impossible to replicate given the barriers to entry in this sector - the Enlarged Group will own 4 of the top 6 out-of-town shopping centres in the UK

·; It is conditional on satisfactory due diligence and financing. This is despite: (i) Simon stating in its letter to the CSC Board dated 24 November 2010 that "we have spent a considerable time with our advisors over the past several weeks completing public diligence on the Company with a view to making an all cash offer"; (ii) the subsequent publication by CSC of a detailed Prospectus; and (iii) a proposal from Simon relating to the funding of the Trafford Centre acquisition announced on 12 December 2010, which contained no due diligence requirement

·; This proposal is subject surprisingly to the approval of Simon's own board

·; Simon has indicated no timescale in relation to announcing a firm intention to make an offer under Rule 2.5 of the Code and has also specifically reserved its "right to terminate its interest in CSC immediately at any stage and without reason"

·; The Board strongly believes that the inclusion of the Trafford Centre in CSC's portfolio will significantly enhance CSC's value

·; The Board believes that CSC's portfolio will generate long term attractive returns for shareholders significantly superior to Simon's cash proposal

CSC also rejects Simon's assertions that it has failed to enter into any dialogue with Simon. The Board has received a series of contradictory letters and proposals since 24 November 2010 from Simon which have been released by Simon to the media immediately and before CSC has been able to discuss them.

As a result, the Board's advisers have today initiated a discussion with the Takeover Panel to establish a latest date and time by which Simon must make a formal offer under Rule 2.5 of the Code or confirm that it does not intend to make an offer.

The Board has decided that it will propose an adjournment to the EGM to approve the Trafford Centre acquisition. The date of the adjourned EGM is now expected to be in late January 2011 ahead of the long stop date under the Trafford Centre acquisition of 31 January 2011. Unless Simon provides to CSC, in advance of the adjourned EGM date, a firm proposal that the Board would be willing to recommend, the Board expects to continue to recommend the Trafford Centre acquisition.

The EGM convened for 12 noon on 20 December 2010 will still proceed but the Board expects that the only resolution to be proposed will be an adjournment resolution and that the Chair of the meeting will use his proxies to vote in favour of the adjournment. Shareholders will not be prevented from attending the meeting and voting in person if they choose to do so.

The Board, which has been so advised by Merrill Lynch International and UBS Limited, believes, as outlined above, that Simon's proposal very substantially undervalues the Company. In providing advice to the Board, Merrill Lynch International and UBS Limited have taken into account the Board's commercial assessments.

Shareholders should be aware that there is no certainty that an offer by Simon will be made.

Contacts:

Capital Shopping Centres Group PLC: +44 (0)20 7887 4220

David Fischel Chief Executive

Matthew Roberts Finance Director

Kate Bowyer Investor Relations

Hudson Sandler (UK Public Relations) +44 (0)20 7796 4133

Michael Sandler

Wendy Baker

College Hill Associates (SA Public Relations) +27 (0)11 447 3030

Nicholas Williams

BofA Merrill Lynch +44 (0)20 7628 1000

Simon Mackenzie-Smith

Simon Fraser

UBS Investment Bank +44 (0)20 7567 8000

Hew Glyn Davies

Jonathan Bewes

Liam Beere

Merrill Lynch International, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for CSC and no one else in relation to the matters referred to in this announcement and will not be responsible to anyone other than CSC for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement.

UBS Limited is acting exclusively for CSC and no one else in relation to the matters referred to in this announcement and will not be responsible to anyone other than CSC for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement.

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been prepared for the purposes of complying with English law and the City Code on Takeovers and Mergers (the "Code") and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

This announcement contains statements about the Company that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the Company's operations; and (iii) the effects of government regulation on the Company's business. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as to the date hereof. The Company disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of the Company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the Company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the Company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the Company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the Company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the Company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of the Company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the Company and by any offeror and Dealing Disclosures must also be made by the Company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the Company and any offeror in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

General

A copy of this announcement will be made available, free of charge, at www.capital-shopping-centres.co.uk/investors/shareholder_info, later today. You may request a hard copy of this announcement, free of charge, by contacting Capita Registrars Limited at 34 Beckenham Road, Beckenham, Kent BR3 4TU. You may also request that all future documents, announcements and information to be sent to you in relation to the Proposal should be in hard copy form.

Terms defined in the announcement made by the Company at 7am on 25 November 2010 in connection with the Acquisition shall have the same meaning when used in this announcement.