Simon Property aims for $1B with offering-WEB ONLY

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Shopping mall giant Simon Property Group Inc. plans to sell another 20 million shares of common stock to raise money for “general corporate purposes” in a new attempt to shore up its balance sheet.

The company had announced it was selling 14 million shares yesterday, but increased the number this morning.

The Indianapolis-based real estate investment trust set a price of $50 for the offering, which will dilute the value of Simon’s existing 231 million shares. At that share price, the offering would raise $1 billion.

Merrill Lynch & Co., J.P. Morgan Securities Inc. and Morgan Stanley will manage the share sale, the company said. Simon expects to grant the underwriters an overallotment option to purchase 3 million additional shares.

The move is the most recent attempt to improve the company’s balance sheet during a tough time for real estate developers. Earlier this month, the company reduced its dividend to from 90 cents to 60 cents per share. It now pays the dividend mostly in new shares, not cash, a decision also designed to preserve liquidity.

Simon sold 17.3 million shares in a common stock offering in March, raising $543.4 million. It also completed a $650 million debt sale earlier in the first quarter.
Simon’s stock price rose $2.57 this morning, or 4.7 percent, to $52.28 per share.

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