Simon Closes Klepierre Acquisition - Analyst Blog
March 15 2012 - 11:45AM
Zacks
Simon Property Group Inc. (SPG), a leading real
estate investment trust (REIT), has recently completed the
acquisition of a 28.7% equity stake (54.43 million shares) in
Klépierre – a Paris-based real estate company that owns, manages
and develops shopping centers, retail properties and offices across
Continental Europe. Earlier in the month, Simon Property had
acquired the ownership interests in Klépierre from BNP Paribas for
$2.0 billion.
Klépierre’s portfolio includes 271 shopping centers in 13
countries, with 50% of its properties in France and Belgium, 25% in
Scandinavia, and the remainder in Central and Southern Europe. The
acquisition has strengthened the international footprint of Simon
Property and is expected to be accretive to earnings.
Simon Property had also purchased its joint venture partner’s
(Farallon Capital Management, L.L.C.) ownership stake in 26 assets
of The Mills Limited Partnership, in a transaction valued at $1.5
billion. The purchase price included the repayment of senior loan
facility and mezzanine loan of the JV, and the retirement of
preferred stock. The Mills acquisition is likely to be completed in
the next week.
The company had funded both the acquisitions from the proceeds
of a just-concluded secondary and debt offering. Simon Property
sold 9.1375 million common shares at $137.00 each, including the
partial exercise of the over-allotment options by the
underwriters.
At the same time, Simon Property also sold $1.75 billion worth
of aggregate principal amount of its senior unsecured notes
consisting of $600 million of 2.150% notes due 2017, $600 million
of 3.375% notes due 2022, and $550 million of 4.750% notes due
2042.
Headquartered in Indianapolis, Indiana, Simon Property is the
largest publicly traded retail real estate company in North America
with assets in almost all retail distribution channels. The company
acquires, owns and leases a diverse portfolio of shopping malls in
North America, Europe and Asia.
Simon Property’s international presence gives it a more
sustainable long-term growth story than its domestically focused
peers. The geographic and product diversity of the company also
insulates it from market volatility to a great extent and provides
a steady source of income.
We maintain our Neutral recommendation on the stock, which
presently has a Zacks #2 Rank translating into a short-term Buy
rating. We also have a Neutral recommendation and a Zacks #3 Rank
(short-term Hold) for Macerich Co. (MAC), one of
the competitors of Simon Property.
MACERICH CO (MAC): Free Stock Analysis Report
SIMON PROPERTY (SPG): Free Stock Analysis Report
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