INDIANAPOLIS, March 9, 2015 /PRNewswire/ -- Simon Property
Group, Inc. (NYSE: SPG) today announced that it has sent a letter
to The Macerich Company (NYSE: MAC) confirming its prior
discussions regarding Simon's proposal to acquire all of the
outstanding stock of Macerich for $91.00 per share in cash and Simon shares. 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% cash
and 50% 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% investment in Macerich (equivalent to 5.71
million shares). The offer is also $20.00 above, or a 28% premium to, the
$71.00 share price underlying the
agreement by Macerich's Board of Directors to issue 10.9% 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%.
Simon also has reached an agreement in principle to sell
selected Macerich assets to General Growth Properties, Inc. (NYSE:
GGP) in connection with the closing of the acquisition. Neither
transaction financing nor the sale of assets to General Growth will
be a condition to closing the proposed transaction.
David Simon, Simon's Chairman and
Chief Executive Officer, said, "We believe Simon's cash and stock
offer would bring compelling value to shareholders of both
companies. Macerich shareholders would receive a significant
current cash premium as well as the long-term upside potential of
an investment in Simon, which is widely recognized for its
high-quality portfolio and industry-leading operating performance.
Simon has consistently delivered outstanding returns to its
shareholders and for a decade has outperformed Macerich in
virtually every key operating and financial category, including
share price performance, comparable NOI growth, sales per square
foot, occupancy rates, FFO growth, dividend growth and total
shareholder returns. We are confident our proposed transaction
provides a highly attractive value proposition to Macerich
shareholders."
Mr. Simon continued, "Simon has a successful track record of
integrating and optimizing acquisitions, having successfully
orchestrated nearly $40 billion of
corporate real estate M&A transactions in 21 years as a public
company. Macerich's assets represent a strong strategic and
geographic fit for Simon, and we believe this is an attractive
opportunity to create long-term value for Simon shareholders. We
expect the transaction to be immediately accretive to FFO, and that
we can improve the operations of these assets. Furthermore, we
are pleased to have reached an agreement in principle with GGP on
the sale of selected properties."
Mr. Simon concluded, "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.
Considering the substantial benefits our offer provides, we are
confident that, given the opportunity, Macerich's shareholders
would accept our proposal. In fact, many of our overlapping
shareholders have voiced enthusiastic support to us for a potential
combination since we publicly announced our stake in Macerich. We
urge Macerich to forego entrenching defensive tactics that obstruct
the will of its shareholders and instead engage in serious
discussions with us. It is our strong preference to work with
Macerich to reach a mutually beneficial agreement, and we are
available immediately to meet with Macerich and its advisors."
Simon's Board of Directors has unanimously endorsed the
proposal. Simon is prepared to devote the resources necessary to
move expeditiously to negotiate and execute a definitive agreement.
There is no financing condition to the proposal and Simon believes
there is no legal or other impediment to completing the proposed
transaction.
BofA Merrill Lynch is acting as financial advisor to Simon and
Latham & Watkins, LLP is acting as legal counsel to Simon in
connection with the proposed transaction.
The full text of Mr. Simon's March 9,
2015 letter to Macerich is below.
March 9, 2015
Mr. Arthur M. Coppola
Chairman & Chief Executive Officer
The Macerich Company
401 Wilshire Boulevard, Suite 700
Santa Monica, CA 90401
Dear Art,
It has now been well over a week since we met to discuss Simon's
interest in acquiring Macerich, and I am disappointed you have not
gotten back to me as you said you would. I am therefore providing
you with a written proposal confirming the basis on which Simon
proposes to acquire Macerich. As discussed, this transaction has
strong strategic logic and would bring substantial value to our
respective shareholders. The key terms of our offer are as
follows:
- A purchase price of $91.00 per
share for 100% of Macerich's outstanding common equity. This
represents a 30% premium to the Macerich closing share price of
$69.88 on November 18, 2014, the last trading day prior to
the disclosure of our 3.6% ownership stake in Macerich which we
continue to own. Our purchase price is also $20.00 per share, or 28%, higher than the price
at which Macerich sold a 10.9% ownership stake to Ontario Teachers'
Pension Plan in November 2014.
- Our purchase price would be paid to Macerich stockholders 50%
in cash and 50% in Simon common stock utilizing a fixed exchange
ratio. With your cooperation, we would endeavor to structure
the acquisition of Macerich in a manner that would preserve tax
deferral for the limited partners of the Macerich operating
partnership.
We also have reached an agreement in principle to sell selected
Macerich assets to General Growth Properties, Inc. in connection
with the closing of our acquisition. Neither transaction financing
nor the sale of assets to General Growth will be a condition to our
closing.
This is a very compelling offer that will enable Macerich
stockholders to realize a substantial and immediate cash return
while building long-term value through ownership of Simon shares
which have delivered industry-leading returns for more than two
decades.
We have completed nearly $40
billion of acquisitions in a variety of complex transactions
during our 21 years as a public company and we see no legal or
other impediment to completing our purchase of Macerich.
All of the necessary resources are available to us to promptly
negotiate and execute definitive agreements. I suggest we
arrange for a call to discuss next steps.
Very truly yours,
David Simon
Chairman and Chief Executive Officer
About Simon
Simon is a global leader in retail real
estate ownership, management and development and a S&P100
company (Simon Property Group, NYSE: SPG). Our industry-leading
retail properties and investments across North America, Europe and Asia provide shopping experiences for millions
of consumers every day and generate billions in annual retail
sales. For more information, visit simon.com.
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
relates to a proposal which Simon Property Group, Inc. ("Simon")
has made for a business combination transaction with The Macerich
Company ("Macerich"). In furtherance of this proposal and subject
to future developments, Simon (and, if a negotiated transaction is
agreed, Macerich) may file one or more registration statements,
proxy statements, tender offer statements or other documents with
the U.S. Securities and Exchange Commission (the "SEC"). This
communication is not a substitute for any proxy statement,
registration statement, tender offer statement, prospectus or other
document Simon and/or Macerich may file with the SEC in connection
with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF
SIMON AND MACERICH ARE URGED TO READ THE PROXY STATEMENT(S),
REGISTRATION STATEMENT, TENDER OFFER STATEMENT, PROSPECTUS AND
OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF
AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy
statement(s) or prospectus(es) (if and when available) will be
mailed to stockholders of Macerich and/or Simon, as applicable.
Investors and security holders will be able to obtain free copies
of these documents (if and when available) and other documents
filed with the SEC by Simon through the web site maintained by the
SEC at http://www.sec.gov.
Simon and/or Macerich and their respective directors and
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. You can find information about
Simon's executive officers and directors in Simon's definitive
proxy statement filed with the SEC on April
10, 2014. You can find information about Macerich's
executive officers and directors in Macerich's definitive proxy
statement filed with the SEC on April 18,
2014. Additional information regarding the interests of such
potential participants will be included in one or more registration
statements, proxy statements, tender offer statements or other
documents filed with the SEC if and when they become available. You
may obtain free copies of these documents using the sources
indicated above.
This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
Forward Looking Statements
This communication may include "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, but are not
limited to, statements regarding Simon Property Group, Inc.'s
("Simon") offer to acquire The Macerich Company ("Macerich"), its
financing of the proposed transaction, its expected future
performance (including expected results of operations and financial
guidance), and the combined company's future financial condition,
operating results, strategy and plans. Forward-looking statements
may be identified by the use of the words "anticipates," "expects,"
"intends," "plans," "should," "could," "would," "may," "will,"
"believes," "estimates," "potential," "target," "opportunity,"
"tentative," "positioning," "designed," "create," "predict,"
"project," "seek," "ongoing," "upside," "increases" or "continue"
and variations or similar expressions. These statements are based
upon the current expectations and beliefs of management and are
subject to numerous assumptions, risks and uncertainties that
change over time and could cause actual results to differ
materially from those described in the forward-looking statements.
These assumptions, risks and uncertainties include, but are not
limited to, assumptions, risks and uncertainties discussed in
Simon's most recent annual or quarterly report filed with the
Securities and Exchange Commission (the "SEC") and assumptions,
risks and uncertainties relating to the proposed transaction, as
detailed from time to time in Simon's and/or Macerich's filings
with the SEC, which factors are incorporated herein by reference.
Important factors that could cause actual results to differ
materially from the forward-looking statements we make in this
communication are set forth in other reports or documents that we
may file from time to time with the SEC, and include, but are not
limited to: (i) the ultimate outcome of any possible transaction
between Simon and Macerich, including the possibilities that
Macerich will reject a transaction with Simon, (ii) the ultimate
outcome and results of integrating the operations of Simon and
Macerich if a transaction is consummated, (iii) the ability to
obtain regulatory approvals and meet other closing conditions to
any possible transaction, including the necessary stockholder
approvals, (iv) if a transaction with Macerich is consummated, the
ability of Simon and General Growth Properties to reach a
definitive agreement related to, and complete, the sale of certain
assets of Macerich, as such sales would not be a condition to the
Macerich transaction, and (v) the risks and uncertainties detailed
by Macerich with respect to its business as described in its
reports and documents filed with the SEC. All forward-looking
statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by this cautionary
statement. Readers are cautioned not to place undue reliance on any
of these forward-looking statements. These forward-looking
statements speak only as of the date hereof. Simon undertakes no
obligation to update any of these forward-looking statements to
reflect events or circumstances after the date of this
communication or to reflect actual outcomes.
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SOURCE Simon Property Group, Inc.