Simon Property to Buy Prime Outlets for $2.33 Billion
Dec. 8 (Bloomberg) -- Simon Property Group Inc., thebiggest U.S. shopping mall owner, agreed to buy Prime OutletsAcquisition Co. for $2.33 billion including debt to expand inthe retail outlet business.
Simon Property will pay $700 million for the owners’interest in closely held Prime Outlets, 80 percent in cash and20 percent in common operating partnership units, Indianapolis-based Simon Property said today in a statement.
Chief Executive Officer David Simon amassed more than $4billion in cash in the past year to fund acquisitions and lastmonth hired Lazard Ltd. to consider purchasing the assets ofmall owner General Growth Properties Inc. In an interview inMarch, Simon said he wanted to “hoard” cash to take advantage“once we see opportunities in the marketplace.”
Prime Outlets, based in Baltimore, owns 22 outlet centersin metropolitan markets including Washington D.C., Baltimore,San Antonio and Orlando. The centers were 92 percent occupied asof June 30 and generated sales of about $370 a square foot,Simon Property said.
“Prime Outlets is an excellent opportunity for Simon as itrepresents a strong strategic fit for our existing premiumoutlet portfolio and enhances our leadership position in theoutlet business,” David Simon said in a statement. “Followingthe completion of this transaction our outlet portfolio willhave 63 centers comprising approximately 25 million squarefeet.”
Deal Value
Simon Property said it intends to fund the cash portion ofthe deal with existing capital. Simon Property was advised byUBS AG and JPMorgan Chase & Co. and was represented by Fried,Frank, Harris, Shriver & Jacobson LLP.
The value of Simon Property’s operating units will be basedon the 10 day trading average of Simon Property common stockbefore the closing of the deal, subject to a 10 percent collar,the company said.
Simon Property may have purchased Prime Outlets after beingthwarted in an effort to purchase General Growth assets. GeneralGrowth President Thomas Nolan said in a Dec. 2 interview thathis company would likely emerge from bankruptcy without sellingits most prized shopping malls.
Prime Outlet centers feature designer merchandise fromGucci, Giorgio Armani, Burberry, Kate Spade, Michael Kors, St.John and Juicy Couture, according to its Web site. The centersalso include stores from Saks Fifth Avenue Off 5th and NeimanMarcus Last Call.
Its largest centers are in Orlando, with more than 773,000square feet, and Birch Run, Michigan, with 681,000 square feet.The company is developing 1 million square feet of new centersand plans to expand to San Francisco and Dallas/Fort Worth,according to its Web site.
To contact the reporter on this story:John Gittelsohn in New York at johngitt@bloomberg.net.
Last Updated: December 8, 2009 09:51 ESTSource: Bloomberg
« Back to Business News
Related News
-
Lloyds Says Bad Loan Provisions Will Fall After Loss Dec 8, 2009 @ 08:30 AM
Aug. 5 (Bloomberg) -- Lloyds Banking Group Plc, the U.K.lender that acquired HBOS Plc in January, said provisions forbad loans will decline “significantly” after it posted afirst-half loss of 3.1 billion pounds ($5.2 billion).
-
Pound Falls to Lowest in Almost Two Months on Dubai Concerns Dec 8, 2009 @ 08:30 AM
Dec. 9 (Bloomberg) -- The pound fell to its lowest levelin almost two months against the dollar on concern Dubai’sstate-controlled companies will have to sell U.K. assets to payfor loan obligations.
-
Euro Near 5-Week Low on Concern More European Ratings to Be Cut Dec 8, 2009 @ 08:30 AM
Dec. 9 (Bloomberg) -- The euro traded near a five-week lowagainst the dollar on speculation credit ratings of moreEuropean nations will be cut after Greece’s debt ranking waslowered by Fitch Ratings.
-
Dubai World in Debt Talks on $26 Billion, Rest Stable Dec 8, 2009 @ 08:30 AM
Dec. 1 (Bloomberg) -- Dubai World began talks with banks torestructure $26 billion of debt, including $3.5 billion owed byproperty unit Nakheel, and said the remainder of its liabilitiesare on “a stable financial footing.”
-
Dubai World in Talks on $26 Billion of Debt, Rest Is 'Stable' Dec 8, 2009 @ 08:30 AM
Dec. 1 (Bloomberg) -- Dubai World began talks with banks torestructure $26 billion of debt, including $3.5 billion owed byproperty unit Nakheel, and said the remainder of its liabilitiesare on “a stable financial footing.”
