The Takeover Panel recently gave Simon until 5pm on January 12 to make a bid or walk away, after which time it cannot bid for six months.
Simon Property Group said its board had given the go-ahead to make a full offer at 425p a share for Capital Shopping Centres, the UK's biggest mall owner whose portfolio includes Manchester's Arndale and Gateshead's Metro Centre, and confirmed it had pulled together a loan to enable it to fund the bid.
The loan has been arranged by a consortium of banks including Citi, Deutsche Bank, Goldman Sachs and Morgan Stanley.
CSC has already said Simon's indicative offer 'substantially undervalues the company'.
Some analysts believe Simon would need to lift its bid to 450p a share to entice CSC shareholders.
Simon, which already owns a five per cent stake in CSC, claims the CSC board refuses to speak to it or give it the financial information it needs to make a full offer.
The bitter row has been complicated because Simon wants Capital to drop a £1.6bn bid for the Trafford Centre.
The US giant believes the bid for the Trafford Centre undervalues CSC by giving away up to 20 per cent of shares to the mall's owner Peel Holdings, which is controlled by billionaire John Whittaker.
Simon renewed its previous appeal for Capital's board to return to the negotiating table as its "put up or shut up" deadline fast approaches.
The Trafford Centre offers 1.9 million square feet of retail, catering and leisure space and attracts 35 million customer visits a year.However, Capital has already rejected Simon's indicative proposal at 425p a share, and has accused it of trying to "frustrate" its bid to buy the Trafford Centre.
Capital was forced to postpone a shareholder vote on the Trafford Centre deal until January 26, after Simon's deadline to make a bid has expired.
Capital believes the Trafford Centre acquisition would cement its position as the leading UK shopping centre group with 14 centres, including four of the country's top six out-of-town destinations.
Visitor numbers grew 6.4 per cent. New retailers included Guess and Mamas and Papas while the Legoland Discovery Centre, which opened in March, has exceeded expectations, driving footfall and inquiries from potential new operators.Simon Property, which operates regional malls across the world, currently owns 387 properties comprising 263 million square feet and employs more than 5,000 staff.
Meanwhile accounts for the year to March 31 show the Trafford Centre increased pre-tax profits from £23.6m to £25.4m, despite a fall in turnover form £87.84m to £84.8m.
Results filed just before Christmas show void costs rose but Peel said its refusal to compromise on tenant mix was a key factor in attracting quality retailers who prefer to distance themselves form the discount image that many other centres have been forced to adopt.
Peel reduced service charges to tenants by £1m during 2009-10 and expects an additional decrease of £340,000 this financial year. However, it said reductions in energy consumption and better waste management had helped to reduce costs.
The next challenge for the centre is the large number of 15-year tenancies which expire in 2013, the accounts state.