Family-controlled Simon Property Group, the U.S.'s largest shopping mall owner, has offered to buy the third-largest mall owner, Macerich Co., for $14.39 billion in cash and stock, according to news reports.
An
LA Biz
report
said that Simon also offered to assume $6.4 billion in outstanding debt, raising the total value of the deal to $22.4 bllion.
The bid “follows multiple refusals by Macerich to discuss a possible deal,”
a Reuters report
noted.
A deal for Macerich, which is based in Santa Monica, Calif., would help Simon, based in Indianapolis, expand in California and Arizona, the Reuters article said.
Simon's board unanimously endorsed the bid, and the company said it is “prepared to devote the resources necessary to move expeditiously to negotiate and execute a definitive agreement,” the
LA Biz
article said.
Both companies are publicly traded real estate investment trusts, subject to laws and regulations that make hostile takeovers difficult,
an article in the
Indianapolis Star
noted.
“The value of the deal amounts to a staggering 39 percent of Simon's total value, or market capitalization,” the
Star
article said. “It would be the highest-priced acquisition yet for Simon, whose CEO and chairman, David Simon, has used acquisitions to help grow the company over the past decade.”
The
Wall Street Journal
reported
that Simon said it would sell some Macerich malls to General Growth Properties Inc., the country's second-largest mall owner, “in what market-watchers see as a way of allaying antitrust concerns.”
The
Journal
article said that David Simon “has a history of pursuing deals aggressively,” although some of his largest acquisition attempts, such as one for Taubman and one for General Growth, have not been successful. (Sources:
LA Biz,
March 9, 2015; Reuters, March 9, 2015;
Indianapolis Star
, March 9, 2015;
Wall Street Journal
, March 10, 2015.)
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