Simon Property cooperating With FTC on Prime Outlets inquiry

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Simon Property Group Inc., the largest U.S. mall owner, is cooperating with a Federal Trade Commission inquiry into its proposed purchase of Prime Outlets Acquisition Co., CEO David Simon said Friday.

“We expect to close this transaction,” he said during a conference call about earnings with analysts and investors. Simon said he doesn’t expect the FTC’s review to reveal any antitrust issues. “We are fully cooperating.”

Simon Property agreed in December to buy Prime Outlets from Lightstone Group for $2.33 billion including debt. The deal would give Indianapolis-based Simon an additional 22 retail outlets, increasing its total to more than 60. Gap Inc., which has stores in both Simon and Prime locations, said in February it was contacted by the FTC about the planned acquisition.

Simon doesn’t intend to sell any of Prime Outlets’s properties, David Simon said.

Some retail tenants of outlet malls are concerned about Simon gaining too much market power should its acquisition of Prime be approved, said Mallory Duncan, general counsel of the National Retail Federation, a Washington-based trade group.

“We have members of all sizes who have expressed concern,” Duncan said. He declined to name which retailers have told the group they are troubled. “Rents could go up. If the antitrust authorities make the wrong decisions, outlets could become less of bargain for consumers who go there to shop.”

Simon also is trying to buy or gain a stake in its biggest competitor, General Growth Properties Inc., which filed for Chapter 11 bankruptcy a year ago.

David Simon said that while his company has been focused on expanding by investing in General Growth, there’s a “distinct possibility” that it won’t win the bidding against Brookfield Asset Management Inc.

While Simon is interested in General Growth’s assets, the company’s balance sheet “scares me,” David Simon said.

“There’s still a lot of secured debt and a lot of highly leveraged assets,” he said during the conference call. “It’s still a highly levered company with not a lot of financial flexibility. Their balance sheet compared to ours is an apple and an orange.”


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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.