Mall owner Simon pushes rival Macerich to do a deal

Mon Mar 9, 2015 1:30pm EDT
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By Sweta Singh

(Reuters) - Simon Property Group Inc (SPG.N: Quote) offered to buy Macerich Co (MAC.N: Quote) for $14.39 billion in a deal that would join the No. 1 and No. 3 U.S. shopping mall owners.

The cash-and-stock offer follows multiple refusals by Macerich to discuss a possible deal, which has enterprise value of $22.4 billion including debt, Simon said on Monday.

Macerich shares rose as much as 7 percent to an 8-year high of $92.43, brushing past Simon's offer of $91 per share. Simon shares were flat at $180.61 in afternoon trading.

A combination of Indianapolis-based Simon and Santa Monica, California-based Macerich could boost their ability to negotiate leases with store owners at a time when mall operators are experiencing a fall in traffic as consumers take to shopping online, which is more convenient and often cheaper.

A deal would also help Simon, which has a market value of about $57 billion, expand in California and Arizona, where Macerich's portfolio of about 53 shopping centers is concentrated.

Simon, led by former investment banker David Simon, has been aggressive its takeover strategy.

In 2010, the company tried to buy General Growth Properties Inc (GGP.N: Quote), now the No. 2 mall owner, with a $10 billion offer.

Simon disclosed a 3.6 percent stake in Macerich in November, seen by many at the time as a precursor to a bid. Up to Friday's close, Macerich's stock had risen 17.7 percent since Simon disclosed its stake.   Continued...

David Simon (L), chairman and CEO of Simon Property Group Inc., talks to Barry Sternlicht, chairman and CEO of the Starwood Capital Group, during "The Changing Winds in the Real Estate Market" panel session at the Milken Institute Global Conference in Beverly Hills, California April 30, 2012.  REUTERS/Fred Prouser