Simon Property Group (SPG - Get Report) agreed to acquire fellow real estate investment trust Chelsea Property Group (CPG - Get Report) for a combination of cash, stock and convertible preferred worth $66 a share.
Simon will acquire Chelsea's roughly 52 million of outstanding common shares and partnership units for $3.5 billion and assume another $1.3 billion in Chelsea debt. Chelsea common shareholders will receive $36 in cash, Simon Property stock worth $15 and Simon convertible preferred stock worth $15.
Simon took out a $1.8 billion acquisition facility to fund the cash portion. It expects the transaction will add at least 9 cents per share to 2005 funds from operations and 18 cents to 2006 FFO. The acquisition should be completed in the fourth quarter.
Chelsea, which primarily owns outlet malls, closed Friday at $58.24, roughly $4.75 below its 52-week high.