NEW YORK (TheStreet) -- Simon Property Group Inc. (SPG - Get Report) is said to have made takeover approaches to Macerich Co. (MAC - Get Report) in an effort to combine two of the biggest shopping mall owners in the U.S., the Wall Street Journal reports.
Simon's latest approach came over the past few weeks, and had before that approached Macerich late last year.
Simon has yet to make a formal offer to acquire Macerich, which has a market value slightly above $13 billion, sources told the Journal.
It is unclear as to how receptive Macerich will be if presented with a takeover offer, the sources added, noting that the company has been in talks with advisors regarding a takeover defense in recent weeks.
Were the two companies to combine it would give them greater influence when negotiating leases with store owners as the industry is struggling with a drop in mall traffic as more consumers are shopping online, the Journal noted.
Shares of Simon Property Group are up by 0.41% to $188.33 at the start of trading on Thursday morning.
Separately, TheStreet Ratings team rates SIMON PROPERTY GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIMON PROPERTY GROUP INC (SPG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, notable return on equity, expanding profit margins and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SIMON PROPERTY GROUP INC has improved earnings per share by 5.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SIMON PROPERTY GROUP INC increased its bottom line by earning $4.46 versus $3.86 in the prior year. This year, the market expects an improvement in earnings ($5.04 versus $4.46).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SIMON PROPERTY GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for SIMON PROPERTY GROUP INC is rather high; currently it is at 52.65%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 29.94% trails the industry average.
- SPG, with its decline in revenue, underperformed when compared the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 7.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: SPG Ratings Report