SANTA MONICA, Calif.,
March 31, 2015 /PRNewswire/ -- The
Macerich Company (NYSE: MAC) ("Macerich" or "the Company") today
announced that its Board of Directors unanimously rejected Simon
Property Group, Inc.'s (NYSE: SPG) ("Simon Property Group")
revised, unsolicited proposal to acquire the Company for
$95.50 per share in cash and
stock. The Macerich Board carefully reviewed the revised
proposal with the assistance of its financial, real estate and
legal advisors, and determined that the proposal continues to
substantially undervalue Macerich and that pursuing the proposed
transaction at this time is not in the best interests of Macerich
and its stockholders.
"Our Board carefully reviewed Simon Property Group's revised
proposal and concluded that it does not reflect the full value of
our company," said Arthur Coppola,
chairman and chief executive officer of Macerich. "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. We have a long-term successful
track record and a strategy that positions Macerich as the premier,
pure-play high-end mall REIT with numerous embedded opportunities
for future value creation and significant upside potential."
Mr. Coppola continued, "Over the past three years we monetized
our lower productivity assets and redeployed that capital in a
non-dilutive manner into expanding and redeveloping our core
portfolio. We have transformed our business to be uniquely
positioned to deliver superior same-store net operating income
(SSNOI) and total net operating income (NOI) growth over the next
several years. Approximately 90% of our $1.04 billion of expected NOI in 2016 will
come from fortress malls. Together with our substantially
improved balance sheet, this positions Macerich to take advantage
of opportunities through any economic cycle. We realize that
Macerich currently faces a disconnect between private market
valuations and public market views – a situation we have seen
before. Letting that disconnect persist is not an option, and
we intend to act decisively to correct the situation by:
- Pursuing the rigorous business plan we put forward in our
November 18, 2014 Investor Day
presentation,
- Continuing with our strategy of recycling out of lower
growth assets and redeploying capital into highly productive
assets,
- Delivering on the expansion and redevelopment projects
currently under way and identifying additional opportunities
to mine NAV growth from our core portfolio,
- Delivering superior SSNOI and total NOI growth,
- Increasing our operating margins by a target of 4% over the
next 18 to 24 months through property level expense reductions and
common area revenue enhancements, and
- Expanding our outlet program selectively and
opportunistically."
Fred Hubbell, lead independent
director of Macerich, added, "Our Board – including in separate
sessions of the independent directors – spent extensive time
carefully evaluating the revised proposal and our standalone plan
with management, Eastdil Secured and our financial and legal
advisors. The Board, which includes real estate experts and a
representative of one of our largest stockholders, concluded that
now is not the right time to sell the company. We remain
committed to continuing to grow stockholder value. We
recognize it is incumbent upon us to have the public market
understand the value of our business and properly reflect it in our
share price. I intend, together with management and other
directors, to engage directly with stockholders over the coming
weeks and months. Furthermore, the Board recognizes the
importance of corporate governance matters, and we are therefore
committed to reviewing both the stockholder rights plan and the
classified board promptly following the annual meeting. The
independent directors and management are absolutely united in the
belief that the execution of Macerich's business strategy will
deliver more value for stockholders than Simon's proposal."
The following is the text of the letter that was sent on
March 31, 2015, to Simon Property
Group Chairman and CEO, David
Simon:
March 31, 2015
Mr. David E. Simon
Chairman & Chief Executive Officer
Simon Property Group, Inc.
225 West Washington Street
Indianapolis, Indiana 46204
Dear David:
On behalf of the Board of Directors of The Macerich Company (the
"Company" or "Macerich"), I want to thank you for your most recent
letter dated March 20, 2015.
Our board carefully reviewed, with the assistance of the
Company's financial, real estate and legal advisors, your most
recent, best and final proposal and the subsequent telephone
conversation you and I had last week. After thoroughly
considering your proposal, the board unanimously concluded that
your proposal continues to substantially undervalue Macerich and
its prospects for continued growth and shareholder value
creation.
Therefore, the board determined that pursuing such a transaction
at this time is not in the best interests of the Company, the
Company's stockholders and other constituencies. Our board
believes that continuing to execute on our strategic plan will
yield substantially more value for our stockholders.
In light of the foregoing, our board authorized me to inform you
that it has unanimously rejected your proposal.
Sincerely,
Arthur M. Coppola
Chairman & Chief Executive Officer
The Macerich Company
Deutsche Bank Securities Inc., Goldman, Sachs & Co. and JP
Morgan Securities LLC are acting as financial advisors to Macerich
and Kirkland & Ellis LLP, Goodwin Procter LLP and Venable LLP
are acting as legal counsel.
About Macerich
Macerich, an S&P 500 company, is a fully integrated
self-managed and self-administered real estate investment trust,
which focuses on the acquisition, leasing, management, development
and redevelopment of regional malls throughout the United States.
Macerich currently owns 54 million square feet of real estate
consisting primarily of interests in 51 regional shopping centers.
Macerich specializes in successful retail properties in many of the
country's most attractive, densely populated markets with
significant presence in the Pacific
Rim, Arizona, Chicago and the Metro New York to Washington, DC corridor. Additional
information about Macerich can be obtained from the Company's
website at www.macerich.com.
Forward Looking Statements
This release contains
statements that constitute forward-looking statements which can be
identified by the use of words, such as "expects,"
"anticipates," "assumes," "projects," "estimated" and "scheduled"
and similar expressions that do not relate to historical matters.
Stockholders are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks,
uncertainties and other factors that may cause actual results,
performance or achievements of the Company to vary materially from
those anticipated, expected or projected. Such factors
include, among others, general industry, as well as national,
regional and local economic and business conditions, which will,
among other things, affect demand for retail space or retail goods,
availability and creditworthiness of current and prospective
tenants, anchor or tenant bankruptcies, closures, mergers or
consolidations, lease rates, terms and payments, interest rate
fluctuations, availability, terms and cost of financing and
operating expenses; adverse changes in the real estate markets
including, among other things, competition from other companies,
retail formats and technology, risks of real estate development and
redevelopment, acquisitions and dispositions; the liquidity of real
estate investments, governmental actions and initiatives (including
legislative and regulatory changes); environmental and safety
requirements; the outcome of Simon Property Group, Inc.'s announced
efforts to acquire the Company; and terrorist activities or other
acts of violence which could adversely affect all of the above
factors. The reader is directed to the Company's various
filings with the Securities and Exchange Commission, including the
Annual Report on Form 10-K for the year ended December 31, 2014, for a discussion of such risks
and uncertainties, which discussion is incorporated herein by
reference. The Company does not intend, and undertakes no
obligation, to update any forward-looking information to reflect
events or circumstances after the date of this release or to
reflect the occurrence of unanticipated events unless required by
law to do so.
Contacts
John Perry,
Senior Vice President-Investor Relations, 424-229-3345
Jean Wood, Vice President-Investor
Relations, 424-229-3366
Joele Frank / Andrew Siegel / Scott
Bisang
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
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SOURCE The Macerich Company