Macerich Jumps as Simon Property Reveals 3.6% Stake
Shares of The Macerich Company (MAC) jumped 9.6% during yesterday’s regular trading session on the NYSE as Simon Property Group Inc. (SPG) revealed its accumulation of a 3.6% stake in Macerich.
Simon Property may further seek a waiver for excess share provision (that limits stake ownership of over 5%), which could pave the way for the company further raising its stake in Macerich.
This development comes up after Macerich revealed gaining of full ownership in five super regional malls, including Queens Center, for $1.89 billion including debt assumption. Macerich gained this ownership in exchange of common stocks with its joint venture partner, Ontario Teachers' Pension Plan Board. With the payment occurring in shares, the Ontario fund gained 10.9% stake in Macerich. (Read: Macerich Gains Full Ownership in Five Premium Malls).
The news has led to speculations that present Macerich as a potential takeover target. If Simon Property aims at acquiring Macerich, then that would help the former gain a solid portfolio of high-quality assets, particularly on the West Coast.
Specifically, Macerich boasts retail assets in densely populated markets with notable presence in the Pacific Rim, Arizona, Chicago and the Metro New York to Washington, DC corridor. In numbers, currently, the company has the ownership of 56 million square feet of real estate space, mainly comprising interests in 52 regional shopping centers, making it an attractive target for takeover. On the other hand, globally Simon owns or holds stakes in over 200 malls and outlet centers.
Macerich currently carries a Zacks Rank #2 (Buy) while Simon Property carries a Rank #3 (Hold). Investors interested in the retail real estate investment trust (:REIT) industry may consider stocks like DDR Corp. (DDR) and General Growth Properties, Inc (GGP). Both stocks carry the same rank as Macerich.
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