The Macerich Co., a Santa Monica-based real estate investment trust that owns regional shopping centers including Santa Monica Place, confirmed today that it received an unsolicited, conditional proposal from Simon Property Group Inc. to acquire the company for $91 per share in cash and stock.
The total value of the proposed transaction is approximately $22.4 billion, including the assumption of Macerich’s approximately $6.4 billion of debt outstanding (inclusive of its pro rata share of mortgage debt from unconsolidated entities). Macerich shareholders would receive consideration in the form of 50 percent cash and 50 percent Simon common stock, utilizing a fixed exchange ratio.
The offer represents a 30% premium to Macerich’s unaffected closing stock price of $69.88 on November 18, 2014, the day before Simon disclosed its 3.6 percent investment in Macerich (equivalent to 5.71 million shares).
The offer is also $20.00 above, or a 28 percent premium to, the $71.00 share price underlying the agreement by Macerich’s Board of Directors to issue 10.9 percent of Macerich’s shares to Ontario Teachers’ Pension Plan in exchange for certain joint venture interests in November 2014. To facilitate that transaction Macerich waived its excess share provision, which restricts share ownership of greater than 5 percent.
The Macerich Board of Directors is reviewing the proposal with its financial and legal advisers, and is advising stockholders to take no action at this time, according to a company statement.
Macerich, an SP 500 company, focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States.
Macerich owns 54 million square feet of real estate, primarily in 51 regional shopping centers, in the Pacific Rim, Arizona, Chicago and the Metro New York-to-Washington, D.C., corridor.