INDIANAPOLIS — Simon Property Group Inc. (NYSE: SPG), the largest mall owner in the United States, has proposed purchasing Santa Monica, California-based real estate investment trust The Macerich Company (NYSE: MAC) by acquiring all of Macerich’s outstanding stock for $91 per share in cash and Simon shares, in a bid valued at more than $22.4 billion.
The proposed transaction includes the assumption of Macerich’s approximately $6.4 billion of debt outstanding. Macerich shareholders would receive consideration in the form of 50 percent cash and 50 percent Simon common stock, utilizing a fixed exchange ratio.
Indianapolis-based Simon also has reached an agreement in principle to sell selected Macerich assets to General Growth Properties Inc. in connection with the closing of the acquisition. Neither transaction financing nor the sale of assets to General Growth will be a condition to closing the proposed transaction.
“We believe Simon’s cash and stock offer would bring compelling value to shareholders of both companies,” said David Simon, Simon’s chairman and CEO. “Macerich shareholders would receive a significant current cash premium as well as the long-term upside potential of an investment in Simon, which is widely recognized for its high-quality portfolio and industry-leading operating performance.
“Simon has consistently delivered outstanding returns to its shareholders, and for a decade has outperformed Macerich in virtually every key operating and financial category,” he added
The bid represents a 30 percent premium to Macerich’s closing stock price of $69.88 on Nov. 18, 2014, the day before Simon disclosed it has a 3.6 percent investment in Macerich (equivalent to 5.71 million shares).
Simon currently owns 190 properties, including highly profitable Roosevelt Field mall on Long Island and Houston Galleria. It has a market value of nearly $60 billion.
Macerich’s portfolio, located primarily in California and Arizona, consists of 59 shopping centers such as Biltmore Fashion Park in Phoenix and Tysons Corner Center near Washington.
Simon’s stock price closed at $180.44 per share on Monday, March 9, up from $161.71 per share a year ago.
Macerich’s stock price closed at $92.76 per share on Monday, March 9, up from $60.25 per share a year ago.
— Scott Reid