NEW YORK (The Deal) -- On Monday Simon Property (SPG - Get Report) went public with an offer for rival mall operator Macerich (MAC - Get Report) valued at $22.4 billion after failing to get a response to private inquiries.

Indianapolis-based Simon Property is offering $91 per share in cash and stock for Macerich in a deal that would see it assume about $6.4 billion in debt. The offer is 30% above Macerich's closing price on Nov. 18, 2014, the day before Simon Property disclosed a 3.6% stake in Macerich.

Simon Property said it has also reached an agreement to sell certain Macerich assets to General Growth Properties (GGP) should a deal be completed. Macerich, of Santa Monica, Calif., currently owns 52 million square feet of real estate, consisting primarily of interests in 51 regional shopping centers.

Simon Property chairman and CEO David Simon said in a letter to Macerich CEO Arthur M. Coppola that Simon was going public with the offer after being "disappointed" that Coppola has not responded to private meetings. Simon in his letter notes that the $91 offer price is 28% above the $71 share price in Macerich's November 2014 deal to sell a 10.9% stake to Ontario Teachers' Pension Plan.

David Simon said he believes the offer "would bring compelling value to shareholders of both companies," giving Macerich holders both an immediate cash return and the potential for long-term appreciation via the Simon shares.

"Simon has consistently delivered outstanding returns to its shareholders and for a decade has outperformed Macerich in virtually every key operating and financial category, including share price performance, comparable NOI growth, sales per square foot, occupancy rates, FFO growth, dividend growth and total shareholder returns," David Simon said.

Simon Property has been an aggressive consolidator, claiming to have orchestrated nearly $40 billion of corporate real estate M&A transactions during its 21 years as a public company. The company last year spun off its strip malls and smaller retailer centers into the separate Washington Prime (WPG - Get Report) in order to focus on higher-end properties.

David Simon said he considers Macerich's assets to be "a strong strategic and geographic fit for Simon [Property]," and urged the company to come to the table for serious discussions.

Macerich offered no comment on Monday morning.

Bank of America Merrill Lynch is acting as financial adviser to Simon, with Latham & Watkins acting as legal counsel in connection with the proposed transaction.

 

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