Macerich rejects final bid from Simon

Macerich Co., owner of the Green Acres Mall, rejected on March 31 the final offer from rival mall developer Simon Property Group after two buyout bids of more than $20 billion each failed to meet Macerich’s expectations.

“Our board carefully reviewed Simon Property Group’s revised proposal and concluded that it does not reflect the full value of our company,” said Arthur Coppola, chairman and chief executive officer of Macerich. “Simon’s proposal has shined a bright light on the value of Macerich and our unparalleled collection of assets in the most desirable and highest barrier-to-entry markets.”

After Macerich announced its rejection of the $95-per-share offer, Simon said in a statement that it would cease its attempt to acquire Macerich, “in light of the decision by the Macerich board of directors not to engage in discussions with Simon.”

A spokesman said Simon had had no plans to make noticeable changes at any of Macerich’s properties had the deal gone through.

The $23.2-billion bid was the second offer made by Simon, the owners of the Roosevelt Field Mall, in an attempt to acquire Macerich, who also rejected Simon’s initial $22.4-billion offer. David E. Simon, chairman and chief executive officer of Simon, said the company was interested in purchasing Macerich because the California-based development group would offer his company a stronger and more diverse pool of properties.

In a letter to Simon, Coppola said the offer “continues to substantially undervalue Macerich and its prospects for continued growth and shareholder value creation.”

Fred Hubbell, lead director of Macerich, said the decision to reject Simon’s offer was motivated by the company’s commitment to grow stockholder value.

“Our board – including in separate sessions of the independent directors – spent extensive time carefully evaluating the revised proposal and our standalone plan,” he said. “The board, which includes real estate experts and a representative of one of our largest stockholders, concluded that now is not the right time to sell the company … The independent directors and management are absolutely united in the belief that the execution of Macerich’s business strategy will deliver more value for stockholders than Simon’s proposal.”

Earlier this year, Macerich, which purchased the Green Acres Mall in 2013 from Vornado Realty Trust for $500 million, announced a two-part, $162-million renovation to the Green Acres Mall.

The planned expansion calls for the nearby Sunrise Cinemas to be torn down and replaced with a new $83-million, 323,000 square foot retail facility, as well as a $79-million upgrade to the existing mall. That will include improvements to the food court and seating areas, roofing, security systems and lighting.