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Simon Makes 'Best and Final' Offer for Macerich
The board of directors for the Macerich Co. unanimously rejected an unsolicited bid from mall giant Simon Property Group Inc. on March 17.
The rejection was followed by another offer from Simon on March 20. The Indianapolis-headquartered company called it a “best and final” offer. It was to acquire all of the outstanding shares of Macerich for $95.50 per share in cash and Simon shares. The total value of the proposed transaction was approximately $23.2 billion, according to a Simon company statement; the stated amount included the assumption of approximately $6.4 billion of Macerich debt outstanding.
Macerich Chairman Arthur Coppola said that Simon’s previous bid had undervalued his company, which develops and runs malls including Santa Monica Place in Santa Monica, Calif. On March 9, Simon made a bid to acquire the company for $91 per share in cash and stock, which some media reports said could add up to $16 billion.
On March 25, Macerich’s stock closed at $87.02.
In a statement, Coppola noted that his company sold its lower-quality malls from its portfolio and acquired “Class-A properties and developments” in some of America’s wealthier neighborhoods. The real estate deals increased Macerich’s sales per square foot from $517 to $587, Coppola said.
The Macerich chief also contended that his board fully supports the company’s projects and strategies. The company will be continuing a campaign to increase its value. In the next five years, it will spend $400 million to $500 million per year on projects, which Coppola forecast will bring a high rate of return and would materially enhance stockholder value.
