Macerich rejects Simon Property offer, adopts poison pill

Tue Mar 17, 2015 4:32pm EDT
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By Sagarika Jaisinghani

(Reuters) - Macerich Co, the third-largest U.S. shopping mall owner, rejected a $14.39 billion unsolicited offer from larger rival Simon Property Group Inc, saying the proposal "substantially undervalues" the company.

Macerich also said on Tuesday it adopted a poison pill, or a shareholder rights plan, with a 10 percent trigger and changed its board structure to thwart a hostile takeover.

Shares of Macerich, which received the $91 per share offer earlier this month, fell as much as 5 percent to $90.29 in early trading. Including debt, the offer was valued at $22.4 billion.

"Macerich's rejection is based on a rosy view of its future prospects," Simon Property Chief Executive David Simon said in a statement, calling the rejection an "extreme, scorched-earth response".

Macerich's directors will now be divided into three classes and their term will be three years, the company said, adding that it would review this structure in 2016.

Macerich is incorporated in Maryland, which allows a company's board to take steps to ward off a hostile takeover without having to seek shareholder approval.

The company said it rejected the offer partly due to antitrust concerns and its inability to evaluate Simon Property's "claims regarding its margins."

"Simon's next step is likely to be to raise its offer," Cowen & Company analyst James Sullivan wrote in a note.   Continued...

Shoppers refer to a map at the King of Prussia Mall in Pennsylvania; a  2.7 million square feet shopping destination owned by Simon Property Group. Picture taken December 6, 2014.  REUTERS/Mark Makela