Simon Property Group Inc., the largest U.S. mall owner and operator of Roosevelt Field mall, has launched a hostile bid to buy rival mall operator Macerich Co., the owner of Green Acres Mall, in deal valued at $22.4 billion.
Macerich shareholders would receive the equivalent of $91 a share, with 50 percent in cash and 50 percent in Simon stock, Simon said Monday. The purchase price includes the assumption of about $6.4 billion of Macerich's debt.
A purchase of Santa Monica, California-based Macerich would be a good thing for Long Island because it would bring different retailers to the area, said Marshal Cohen, chief retail analyst with Port Washington-based NPD Group.
"Can Long Island handle another Roosevelt Field? The answer is absolutely yes," Cohen said.
Macerich announced plans earlier this year to build a new $83.7 million retail center to replace the Sunrise Multiplex Cinemas, adjacent to Green Acres Mall, plus to spend an estimated $79 million on improvements to the 1.7 million-square-foot mall.
Macerich's $163 million expansion plan for Green Acres would probably still go forward under ownership of Indianapolis-based Simon, Cohen said. Simon declined to comment on the future of Green Acres Mall expansion if the acquisition is successful.
Macerich confirmed in a statement that it has received an "unsolicited, conditional proposal" from Simon, which its board of directors will review.
Simon's offer represents a 30 percent premium to Macerich's closing price on Nov. 18, the day before Simon disclosed it had accumulated a 3.6 percent stake in Macerich. Shares of Macerich rose 7 percent in afternoon trading to $92.95.
Simon also has reached an agreement to sell selected Macerich assets to Chicago-based General Growth Properties, Inc., the No. 2 U.S. mall landlord, if the deal closes.
Simon is taking its proposal to Macerich's shareholders after Macerich refused to discuss an acquisition, Simon's chairman and chief executive David Simon said in a statement.
Cohen said it is a "desperate plea whenever someone goes around management and to shareholders," who "can put pressure on the executive board. I would say look for this to be accelerated."
Simon, with more than $56 billion in market value, operates more than 200 properties worldwide, including Walt Whitman Shops and Smith Haven Mall.
Buying Macerich, a public company with about $14 billion in market value, would increase Simon's reach in the United States, but would not greatly affect Long Island since Macerich only owns Green Acres here, said Mario Asaro, president of Industry One Realty Corp., a commercial real estate firm based in Melville. Macerich owns more than 50 shopping centers including Queens Center Mall, the Shop at Atlas Park, both in Queens, and Kings Plaza Shopping Center in Brooklyn.
Asaro said that malls have been struggling because of e-commerce.
Macerich bought Green Acres in 2012 for $500 million from Manhattan-based Vornado Realty Trust.