Macerich Co MAC was trading more than 5 percent higher on Monday after Simon Property Group Inc SPG announced that it has sent a letter confirming discussions to acquire Macerich for $91.00 per share in cash and Simon Property Group shares.
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 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... We expect the transaction to be immediately accretive to FFO, and that we can improve the operations of these assets."
Industry experts believe that the merger of Simon Property Group and Macerich will give the companies more leverage when negotiating leases with mall and outlet store owners. This is important due to the trend of consumers shopping online.
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