Simon Property Group, Inc. (NYSE: SPG) has sent a letter to The Macerich Company (NYSE: MAC) outlining its best and final offer to acquire all of the outstanding shares of Macerich for $95.50 per share in cash and Simon shares.
All other terms of Simon’s previous $91.00 per share offer remain the same, including consideration in the form of 50% cash and 50% Simon common stock, utilizing a fixed exchange ratio. The total value of the proposed transaction is approximately $23.2 billion, including assumption of approximately $6.4 billion of Macerich debt outstanding (including its pro rata share of mortgage debt from unconsolidated entities).
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The offer represents a 37% 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 $24.50 per share above, or a 35% premium to, the $71.00 share price underlying the November 2014 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.
David Simon, Simon’s Chairman and Chief Executive Officer, said, “Macerich’s decision to adopt extreme defensive measures is disappointing. We have repeatedly expressed our desire to work with Macerich to reach a mutually beneficial agreement and do not believe a protracted, multi-year proxy battle is in the interests of the shareholders of either company. We believe our offer is compelling and will deliver significant and immediate value to Macerich shareholders. We encourage the Macerich Board to give our proposal the serious consideration it deserves and to take into account the views of Macerich shareholders.”
He even sent a letter to Mr. Arthur M. Coppola, Chairman and CEO of The Macerich Company, which opened somewhat curtly with the following: “I had hoped that by now, we could have engaged in meaningful discussions to determine if a deal could be agreed upon for Simon’s acquisition of The Macerich Company. Because that has not happened, I am writing to advise you as follows.”
The letter went on to say, “We hope you and your board will give this offer full and fair consideration and will take into account input from Macerich shareholders.
“Out of respect for the shareholders of both companies, we have decided not to nominate directors for the Macerich board or otherwise prolong this process.”
Simon gave a deadline of 5:00 p.m., Pacific Time on Wednesday, April 1, to either accept this final offer or see it rescinded.
