Macerich #Corpgov Issues Gets Attention From Two Activists by Activist Stocks
Simon Property tried to take over rival Macerich, with MAC rejecting the best and final offer of $95.50 a share. MAC has adopted a poison pill and staggered its board elections
So Jon Litt’s Land & Buildings fund got involved on the day that Macerich rejected the offer, nominating four directors for the MAC board. At the time, it only owned 1,000 MAC shares. MAC has challenged that premise that L&B owned shares in time to elect board nominees.
The market has praised SPG for its composure to not overpay for Macerich. But the key is that the number of mall development locations are running slim. SPG needed the deal more than MAC. Growth is getting harder to come by, hence the reason SPG has been downsizing of late (read: spinoff of Washington Prime Group).
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We could have a proxy battle on our hands at MAC. Granted, Litt has been in discussions with Macerich about adding two independent members to the board, but Litt is still pushing for another seat for himself. Now, MAC is taking L&B to court, claiming that the fund didn’t own shares when it made the board nominations.
With that, L&B teamed up with Dan Lewis’ Orange Capital this week to give it a bigger say, with Orange owning 1% of MAC. Orange has the deeper pockets and has a history with real estate themed activism.
With SPG having been interested in MAC, it should shine a light on MAC’s asset portfolio. The barriers to entry in the mall REIT space are high, and even higher for premium properties like Macerich’s. MAC is generating some $620 a square foot on its top 40 properties, while the U.S. mall industry average is around $480 per sq. ft. Although SPG likely won’t not come back to the table for MAC, it’s said that private equity could be interested.