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Shares of Simon spinoff dip in early trading

May 29, 2014

Shares of fledgling Indianapolis firm Washington Prime Group Inc. fell 2.8 percent to $20.44 in morning trading on Thursday, its first day of trading on the New York Stock Exchange.

Real estate behemoth Simon Propetty Group Inc. completed its separation from Washington Prime on Wednesday, as Simon shareholders received one share of the spinoff for every two shares of Simon they held.

Shares of Simon dipped slightly in Thursday morning trading. Shares were trading for about $165 apiece, down from $175 on Wednesday, reflecting the roughly $10 of value per share carved out for the spinoff company.

Simon investors who now hold shares both in the main company and spinoff have roughly the same investment value as they had at the market close on May 23.

Due to the lost revenue from its former properties, Simon on Thursday revised its estimates of earnings per share for 2014. Simon now predicts earnings of $4.21 to $4.31 a share, down from its prior view of $4.55 to $4.65 a share, after accounting for the spinoff and related transaction costs.

Simon announced the spinoff in December and the name of the new company in February. The new real estate investment trust owns 98 retail properties, including 13 in Indiana, and is expected to generate net operating income of more than $400 million in its first year.

Washington Prime grouped Simon strip centers and smaller enclosed malls into its portfolio, allowing management to focus specifically on that market segment. Simon will concentrate on its larger malls and other premium properties.

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