After terse deliberations, Simon Property Group abandoned their attempt to acquire Scottsdale Fashion Square from Santa Monica-based Macerich Co. Macerich Co. reported on Wed., April 1 that their board unanimously rejected Simon Property Group’s offer, despite the falling value of the company’s stock, which closed at $78.73 on April 1. Simon Property Group offered to buy Macerich’s shares for $95.90, a $23.2 billion acquisition offer including 6.4 billion of Macerich debt.
Macerich Co. rejected Simon Property’s original offer of $91 per share on Tues., March 17. Simon Property Group is the largest mall owner in the country, with a portfolio that includes the Forum Shops at Caesars in Las Vegas. They currently have two properties in Arizona, Arizona Mills Mall and Phoenix Premium Outlets, and are constructing an outlet center in Tucson. Macerich Co. has 67 shopping centers, 19 of which are in Arizona. Their other Arizona properties include Chandler Fashion Center, Arrowhead Towne Center, Paradise Valley Mall and Superstition Springs Centers.
While Macerich Co. contends that Simon Property Group’s offer undervalued their company, it’s possible shareholders will be displeased with the board’s decision. Cathy Seifert, the Director for Financial Institution Research for Standard & Poor’s, has advised stockholders to hold their shares in Macerich Co, but urged the company to determine how their decision to remain independent will benefit stockholders.
Simon Property Group, however, was commended by Seifert, who acknowledged the company’s decision to not pursue a hostile takeover. Consequentially, she raised her opinion of the company from a “hold” to a “buy.”