Simon Property Bids $16 Billion for Macerich

Simon Property Group Inc. announced that it has confirmed a $16 billion cash-and-stock offer to buy Macerich Co. If this deal passes and is approved, it will combine the two largest shopping-mall owners in the United States.

Simon Property Group Inc., which already owns a 3.6% stake in Macerich, offered to buy the company at $91 a share. This offer price would be at a 5% premium of what the share last traded on Friday. After the announcement by Simon Property Group Inc., Macerich Co’s share jumped nearly 6% showing signs that the final takeover offer will probably end up being more than the price already proposed. With the recent announcement, this deal is now valued close to be around $22.4 billion, a huge increase from the $13.7 billion Macerich was valued at prior to this acquisition proposal.

It is important to note that this deal has many possible hurdles still ahead. Being that these two companies are the largest mall owners in the United States; together they will control most of the market leaving very little space for competition. It is also important to note the general decline in consumer mall shopping. Being that less and less people are going to physical stores to shop, we may see the profitability of these two companies decrease, which may mean that this deal could end up being a major mistake for both.

By: Adit Shah

http://www.wsj.com

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