The pastÂ few weeks have seen dramaticÂ developments in commercial real estate, as Simon Property Group, the largest mall owner in the U.S., has attempts to buyÂ The Macerich Company, the third-largest owner, in a hostile takeover. Macerich’s portfolio also includes Santa Monica Place and Westside Pavillion.
Between the time that Simon announced its initial offer, and the time Macerich rejected the final offer, bidsÂ crept from $91 per share to $95.50 per share,Â and the total price tag increased from $16.8 billion to $23.2 billion.
Macerich rejected the offers on the grounds that it was being undervalued.Â In addition to doing so, Macerich approved a “poison pill” provision allowing shareholders to “buy shares at a discount, diluting an acquirerâ€™s stake. The company also staggered its board of directors so that only a minority of seats can open up each year. Such moves are designed to thwart takeover attempts.” (WSJ)
Activist investor Orange Capital LLC, a New York-based hedge fund with about $1.3 billion under management, has joined the fight, hoping to pressure MacerichÂ to reconsider engaging withÂ Simon. Orange CapitalÂ thenÂ “teamed up with Land and Buildings Fund LLC, an activist fund led by Jonathan Litt, and firstÂ nominated directors to Macerichâ€™s board” (WSJ), and then became involved in aÂ series of suits and countersuits with Macerich disputingÂ Litt’s eligibilityÂ to nominate board members. Both suits are pending in Maryland state court.
For more, please see the articles below (in chronological order).
Santa Monica MirrorÂ March 13, 2015
WSJ April 1, 2015
Forbes April 1, 2015
WSJ April 15, 2015