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Macerich Turns Down Simon's Bid Citing Undervaluation

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Macerich Turns Down Simon's Bid Citing Undervaluation

The board of leading mall operator Macerich has rejected the hostile takeover bid of its bigger rival, Simon, on the grounds that it undervalued the company at $22.4B. Simon announced its $91 a share offer earlier this month in a move that spoke to the resilience of luxury malls in a time of struggle for other traditional shopping centers. The Macerich board also announced that it would initiate a shareholder rights, or poison pill, plan strategy used to dissuade hostile bids from corporate suitors by offering stock at a discount.

In a letter to David Simon, the cheif of top mall operator Simon Properties, Macerich chief executive Arthur Coppola wrote:

"Our board has complete confidence in our strategic plan and the ability of our experienced management team to successfully execute it. Over the past two years we sold lower quality malls and recycled the capital into value enhancing redevelopment and acquisition opportunities, increasing our sales per square foot from $517 to $587...We plan to continue delivering industry leading growth and to generate long-term value for our stockholders."[NYT]