Macerich rebuffs Simon Property's $16bn takeover proposal

US real estate investment trust Macerich has rejected a $16bn takeover proposal from rival Simon Property Group, saying the unsolicited bid substantially undervalues the company.

Macerich further went on to thwart potential bids by approving two governance changes aimed at making it harder for it to be taken over. The company’s board adopted a new classified board structure as well as a limited duration stockholder rights plan. Macerich said it would review the need for a classified board structure and the shareholder rights plan in 2016.

Simon Property, the largest mall owner in the US, last week offered $91 a share in cash and stock for Macerich in an attempt to expand its presence in the mall space. However, Macerich Chairman and Chief Executive Arthur Coppola on Tuesday said Simon’s offer undervalued Macerich and wasn't in the best interest of the company and its shareholders.

“Over the past two years, we have transformed Macerich’s portfolio by selling lower quality malls to fund our highly value-accretive development pipeline,” Coppola said. He added that over the next five years, Macerich, which owns or has stakes in more than 50 malls, plans to spend $400m to $500m a year on development and redevelopment plans.

Simon Property responded to Macerich's rejection with disappointment. "It is truly disappointing Macerich would not even meet to discuss our proposal and remarkable that its view on value could have changed so drastically just four months after issuing 10.9% of its shares at the $71.00 level," it said.