Macerich, Simon shares rise on talk of acquisition

Macerich Co. shares had their biggest increase in three months Thursday morning after the Wall Street Journal reported that Simon Property Group Inc., the largest U.S. mall owner, has made approaches to buy the company.

Shares in Simon also rose, but not as significantly.

Simon, based in Indianapolis, made a takeover approach in the past few weeks after making a previous one late last year, the Journal reported Wednesday, citing people familiar with the matter. Simon hasn’t made a formal offer for the Santa Monica, California-based mall landlord, the newspaper said.

Simon said in November that it had accumulated a 3.6-percent stake in Macerich and may try to buy more, sparking speculation of takeover plans. Simon said at the time it may seek to have the real estate investment trust waive a provision that restricts ownership to 5 percent. A purchase of Macerich, which has a high concentration of West Coast properties, would increase Simon’s reach in the United States.

Macerich shares climbed 5.7 percent Thursday morning, to $88.59 each. The shares have jumped about 27 percent since Simon disclosed its stake on Nov. 19, giving Macerich a market value of about $14 billion. It is the third-largest shopping mall owner when measured by market capitalization.

Simon shares rose as much as 0.9 percent Thursday, to $189.29.

The reason Simon would go after Macerich is to get “access to a portfolio of malls that otherwise they have no way of getting,” Jeffrey Langbaum, REIT analyst for Bloomberg Intelligence, said in a phone interview. “The higher-quality mall REITs have to be creative to find acquisitions because there is not a lot out there for sale.”

Simon has 190 properties and a market value of nearly $60 billion. Macerich has a portfolio of 59 shopping centers concentrated in California and Arizona.

Les Morris, a Simon spokesman, declined to comment on the Journal report Wednesday. A voicemail left for Thomas O’Hern, Macerich’s chief financial officer, wasn’t returned.

Simon has been developing outlet malls around the world while refurbishing and expanding some of its biggest U.S. properties to boost growth.

The company has become the biggest U.S. REIT, with a market value of about $60 billion, in part by making acquisitions and entering joint ventures. Last week, Canadian retailer Hudson’s Bay Co. said it agreed to contribute 42 properties to a retail venture with Simon that will be valued at $1.8 billion.

Simon has also been active in transactions outside the U.S. In 2012, the company acquired an interest in European mall owner Klepierre, based in Paris.

The REIT hasn’t always been successful in trying to complete deals. It failed in an effort to take over General Growth Properties Inc. after the second-largest mall owner filed for bankruptcy in 2009. General Growth exited bankruptcy in 2010.

Before Simon’s share purchase disclosure last year, Macerich said it bought the share of five U.S. shopping malls it didn’t already own from a subsidiary of the Ontario Teachers’ Pension Plan Board for $1.89 billion, including the assumption of debt. The purchase price included $1.22 billion of stock issued to the pension plan, or an ownership of almost 11 percent.