Mall Developer Simon Property Makes Hostile Bid for Rival Macerich

Mall developer Simon Property Group has launched a $22.4 billion hostile bid for rival The Macerich Company, a move that analysts say could trigger an FTC investigation. Simon’s CEO, David Simon, made his overtures public after Macerich executives refused to negotiate.
“Notwithstanding multiple attempts, including meetings in December 2014 and February 2015 following the disclosure of our investment in November 2014, Macerich has thus far refused to engage in discussions with us regarding the merits of an acquisition by Simon,” David Simon said in a statement.

Simon Property Group, which owns The Forum Shops in Las Vegas and Woodbury Common Premium Outlets in New York, is the largest high-end mall operator in the country with 37 properties. Macerich owns 54 million sq. ft. in 51 malls across the U.S.

Simon’s offer of $91 per share totals $22.4 billion, including assumption of Macerich’s $6.4 billion in debt. If the deal were to go through, Simon says it would immediately sell some of Macerich’s assets to General Growth Properties, Inc., probably to ward off the FTC.

Macerich acknowledged Simon’s unsolicited bid and asked its shareholders not to do anything until the board reviewed the offer. Analysts think Macerich may be holding out for a higher offer.