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Firm Drops Bid to Buy Out Owner of Santa Monica Place

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Hector Gonzalez
Staff Writer

April 3, 2015 -- An Indianapolis real estate investment company has dropped its hostile bid to buy out the owner of Santa Monica Place for more than $23 billion.

Simon Property Group Inc. announced Tuesday it has withdrawn its latest unsolicited offer to buy the Santa Monica-based Macerich Company for $95.50 a share. Simon had raised its initial proposal of $91 a share deal offered in early March, but the revised bid did not trigger talks between the two companies.

Simon officials said the company withdrew its bid based on Macerich’s Board of Directors’ March 18 decision “not to engage in discussions with Simon.”

Arthur Coppola, president and CEO of Macerich, said Wednesday the company’s Board of Directors “carefully reviewed Simon Property Group's revised proposal and concluded that it does not reflect the full value of our company.”

“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,” said Coppola. 

“We have a long-term successful track record and a strategy that positions Macerich as the premier, pure-play high-end mall REIT (Real Estate Investment Trust) with numerous embedded opportunities for future value creation and significant upside potential."

In a letter in mid-March in response to the Macerich board’s decision to reject the offer, Simon’s president and CEO, David Simon, said his company saw no legal obstacles “and no other impediments” in moving ahead with the takeover, “aside from the Macerich Board.”

“The strategic logic of our proposal has been widely recognized, the value is compelling, and it is not conditioned on financing or dispositions,” Simon said last month.

Simon Property Group owns shopping malls in North America, Europe and Asia and is the largest mall operator in the United States. Macerich, in addition to owning Santa Monica Place, owns shopping malls in Chicago, New York and Washington, D.C., and is the nation’s third largest mall owner, according to Forbes.

Coppola said last month that his company’s “robust portfolio” of investment properties would deliver “significantly greater value to Macerich stockholders than Simon’s proposal.”

Macerich plans to invest $400 million to $500 million a year over the next five years on “high-return-on-cost projects that it expects will enhance stockholder value,” Coppola wrote.

In 2008, Macerich completed a $275 million redesign of Santa Monica Place, hiring world-renowned architect Frank Gehry to design the renovation. Plans are continuing to add a state-of-the-art movie complex on the top floor.

Macerich’s stock shares fell 2 percent Wednesday.


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