Macerich Co., owner of Santa Monica Place, has rejected an unsolicited bid from rival mall owner Simon Property Group Inc., saying the $16-billion proposal “substantially undervalues” the company.
Santa Monica-based Macerich said in a statement Tuesday that its portfolio has been upgraded over the last two years as it has sold off lower-quality malls.
“As you know, Macerich owns and operates a high quality portfolio of regional shopping centers in prime locations,” said Macerich Chief Executive Arthur Coppola, in a letter to Simon Properties Chief Executive David Simon. “Our portfolio contains many trophy assets of a kind that rarely become available for sale and cannot be replicated.”
Indianapolis-based Simon Property had offered Macerich shareholders $91 a share in equal amounts of cash and stock last week. Simon is the nation's largest mall owner.
In addition to rejecting the bid, Macerich also said its board of directors had unanimously approved two governance changes to deter “coercive takeover attempts.” These changes include the adoption of a classified board structure, in which directors would be assigned to one of three classes and serve three-year terms, and a stockholder rights plan.
In its proposal, Simon said it had entered into an agreement to sell selected Macerich assets to mall owner General Growth Properties, according to a Macerich statement. Macerich said Simon sent a letter Thursday saying it was considering the nomination of five dissident candidates to stand for election at Macerich's annual meeting of stockholders.
David Simon, Simon’s CEO, said he was disappointed by the rejection: “The Macerich board has sent shareholders a clear message that it will do everything in its power to block a value-creating transaction and prevent them from having a voice in matters critical to the value of their investment,” he said in a statement.
Macerich shares closed down $3.29, or 3.5%, at $91.60.