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Simon spinoff plans $4.3B merger with Ohio mall firm

September 16, 2014

Washington Prime Group Inc., a U.S. shopping-center landlord spun off this year from Indianapolis-based Simon Property Group Inc., has agreed to buy Glimcher Realty Trust of Columbus, Ohio, for about $2 billion in cash and stock, the companies announced Tuesday.

The deal is valued at about $4.3 billion when including assumed debt, the companies said. The combined entity, to be known as WP Glimcher, will have about 68 million square feet of gross leasable area and a portfolio of 119 properties.

As part of the transaction, Simon Property, the largest U.S. mall owner, will acquire Jersey Gardens in Elizabeth, New Jersey, and University Park Village in Fort Worth, Texas—properties currently owned by Glimcher—for $1.09 billion in cash.

Glimcher stockholders will receive $10.40 in cash and 0.1989 of a share of Washington Prime for each Glimcher share, the companies said Tuesday in a prepared statement.

Based on Monday’s closing prices, the transaction values Glimcher at $14.07 a share, a 33-percent premium.

“We went public just three months ago, expecting to utilize our strong platform, relationship with Simon, cash flow and investment-grade balance sheet to grow,” Washington Prime CEO Mark Ordan said in a written statement. “This transaction with Glimcher checks every box, very early in our company’s trajectory.”

Washington Prime's corporate headquarters is in Bethesda, Maryland, but its operations headquarters is in Indianapolis, in Simon's downtown headquarters.

The deal is expected to be completed in the first quarter of 2015. Ordan will be chairman of the combined company, which will be based in Columbus. Glimcher Chairman and CEO Michael Glimcher will be CEO.

Simon shares rose 62 cents on Tuesday morning, to $166.16 each.

Washington Prime shares dropped 5.3 percent, to $17.48 each, and Glimcher shares jumped 30 percent, to $13.85 each.

“The new entity has a higher-quality portfolio and a solid balance sheet,” R.J. Milligan, an analyst at Raymond James & Associates Inc. in St. Petersburg, Florida, said. “It’s a great price for Glimcher and it’s going to enable the new company to continue to acquire retail properties in the United States.”

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