Simon ends $16.8B bid to buy rival Macerich

Simon Property Group has called off its hostile $16.8 billion takeover bid for Macerich Co. that would have tied together two of the nation’s largest mall operators.

The Indianapolis company said late Tuesday it had withdrawn what it called its best and final offer of $95.50 per share after Macerich’s board unanimously rejected the bid. The newest offer was valued at $23.2 billion counting debt.

Macerich, based in Santa Monica, California, said the bid was still too low. Its shares were trading down $4.63 at 12:30 p.m., to $79.70, well under what Simon had offered.

“The board unanimously concluded that your proposal continues to substantially undervalue Macerich,” Macerich Chairman and Chief Executive Officer Arthur Coppola said in a letter to Simon Chairman and CEO David Simon. “Our board believes that continuing to execute on our strategic plan will yield substantially more value for our stockholders.”

Simon made its bid for Macerich public in early March after saying that the shopping center owner refused to negotiate after it began buying Macerich shares late last year.

Simon is by far the larger of the two companies, with ownership in more than 300 shopping centers. Macerich owns or has stakes in about 50 malls, including a concentration in California and the Southwest, where Simon is anxious to expand its holdings.

The deal held the potential to increase Simon’s presence in Downtown Indianapolis where its headquarters tower overlooks the Indiana Statehouse.

This marks another failed major acquisition for Simon, which attempted to acquire General Growth after it filed for bankruptcy in 2009. With a partner, Simon also tried to buy Taubman Centers, of Bloomfield Hills, Mich., more than a decade ago, but was thwarted by a state anti-takeover law.

With the Macerich deal off the table, S&P Capital retail analyst Cathy Seifert raised the firm’s 12-month target price on Simon stock by $18 a share, to $218.

“We applaud (Simon’s) decision not to pursue a hostile takeover of rival mall REIT the Macerich Co.,” S&P said in a report to investors. “We think (Simon) may pursue other opportunities to grow and expand its footprint.”

Simon stock at 12:30 p.m. was trading up $1.72 a share on the day, to $197.36.

Associated Press contributed to this story.

Call Star reporter Jeff Swiatek at (317)444-6483. Follow him on Twitter: @JeffSwiatek.