Simon takes its takeover case to Macerich shareholders

Mall landlord giant Simon Property Group has ratcheted up its rhetoric in its apparently hostile $16-billion takeover attempt of rival Macerich Co. of Santa Monica that could join two of the country’s largest shopping center owners.

Simon on Monday went over the heads of Macerich managers with a direct appeal to shareholders to accept an offer of $91 a share in cash and Simon stock.

On Tuesday, Simon posted a presentation on its website intended to convince Macerich investors to accept Simon’s proposal. It highlighted the 7% jump in the value of Macerich stock Monday as Simon’s takeover attempt made news.

“We are encouraged by the market’s positive response to the strong strategic logic underlying a combination of Simon and Macerich,” Simon Chief Executive David Simon said in a statement. “The presentation we have released today demonstrates the compelling nature of our offer based on a wide range of financial and operations metrics.”

Indianapolis-based Simon outperforms Macerich “in virtually every key operating and financial category” including shareholder returns, he said.

Among the markers cited were sales of $619 per square foot in Simon malls last quarter compared to $587 in Macerich centers.

Net operating income growth from 2006 through 2014 was 3.8% at Simon compared to 2.7% at Macerich. Total overhead costs as a percentage of total revenue last year were 3.5% at Simon and 8.7% at Macerich.

Macerich said Monday it was reviewing Simon’s offer and urged its shareholders to take no action. On Tuesday, Simon egged them on.

“Macerich shareholders interested in a significant cash premium and the upside potential of an investment in Simon should communicate their views,” David Simon said.

Among Macerich’s 51 malls are Santa Monica Place and Westside Pavilion. Simon owns slightly more than 200 malls including Brea Mall, Del Amo Fashion Center in Torrance and Ontario Mills outlet mall.