Macerich Co. has rejected an unsolicited bid from rival mall owner Simon Property Group Inc., saying the $16 billion proposal “substantially undervalues Macerich.”
The Santa Monica, Calif.-based company said in a statement Tuesday that its portfolio has been upgraded over the last two years as it has sold off lower-quality malls and invested in redevelopment projects, increasing its sales per square foot from $517 to $587.
Macerich also cited plans to spend $400 million to $500 million per year on projects that are expected to enhance stockholder value.
“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. Most could not be built today and substitutes do not exist.”
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 said its board of directors unanimously approved two governance changes. 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.
Both changes were made to protect against “coercive takeover attempts,” the company said in a statement.
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.
A Simon Property Group spokeswoman did not immediately respond to a request for comment.