Few companies compare to Indianapolis-based Simon Property Group, Inc. (NYSE: SPG) ("SPG"), which is the largest shopping center owner and operator in the United States and one of the largest in the world. shop for sale in qatar
The Indianapolis, IN-based firm revealed on Thursday that it would make a $2 billion acquisition in Paris and a $1.5 million acquisition in the United States.
The company announced that it has reached an agreement with BNP Paribas (Euronext Paris: BNP) to buy a 28.7% equity stake (54,430,000 shares) in Klépierre (Euronext Paris: LI) for €28.00 per share, or a gross deal value of around $2 billion (€1.5 billion).
The Indiana-based company will receive payment of Klépierre's dividend, which will be announced in April 2012, according to SPG chairman and CEO David Simon, who signed off on the news
Klépierre is a real estate company headquartered in Paris that operates, manages, and builds shopping malls, retail assets, and offices in strategic locations throughout Continental Europe.
Klépierre has 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.
"We are really excited to become the largest shareholder in Klépierre," Simon said, "which has a portfolio of unique retail assets in strong European markets."
SPG sees the investment in Klépierre as an attractive opportunity to expand our global reach; we've long admired Klépierre's pan-European footprint and growth potential, and we're excited to work closely with the Klépierre management team."
Simon would become Chairman of Klépierre's nine-member Supervisory Board as part of the Klépierre deal. Two more SPG members will be added to the Klépierre Board of Directors.
"We are very excited to have Simon Property Group as a major investor in Klépierre, which will combine Klépierre's experience, strong European presence, and growth potential with the expertise and leadership of the largest global retail real estate firm," Laurent Morel, Chief Executive Officer of Klépierre, said in the same statement.
Simon's partnership with the Klépierre team will be a valuable asset in driving our company's sustainable growth."
At the end of 2011, Klépierre, a publicly traded real estate firm, had assets worth €16.2 billion.
Through its subsidiaries, Ségécé and Steen & Strm, Scandinavia's largest shopping center owner and manager, Klépierre specializes in planning, maintaining, and maximizing the value of its real estate properties. Klépierre is part of the SBF 40, CAC Large 60, and EPRA Eurozone indexes and is traded on Euronext Paris.
The agreement with Klépierre is scheduled to close next week. SPG has no plans to buy more Klépierre stock, according to Simon.
SPG has announced that it has signed a definitive agreement with its U.S. joint venture partner Farallon Capital Management, L.L.C. ("Farallon") in which SPG will acquire Farallon's stake in 26 properties of The Mills Limited Partnership at the same time as the Paris transaction ("The Mills")
According to Simon, the deal is worth $1.5 billion.
Farallon is headquartered in San Francisco, with branches in New York, London, Hong Kong, Singapore, and Tokyo.
The Mills' senior loan facility and mezzanine loan will be repaid, and preferred shares will be retired as part of the transaction. The Mills assets included in this agreement are listed below, and they will all be controlled by SPG.
"The Mills acquisition is a compelling opportunity for SPG to extend our investment in a portfolio of assets we already know and manage, which are well-located in key metropolitan markets, have substantial customer brand equity and vast trade areas, and produce significant cash flow and overall revenue volumes," Simon says.
"We've enjoyed working with Farallon since our first investment in 2007, and we've made great progress in enhancing The Mills' properties. We expect these high-quality, well-positioned properties to continue to improve, and we will continue to seek redevelopment opportunities across the portfolio."
Farallon's Managing Member, Rocky Fried, said that his business is "This result has made me extremely happy. We had a shared vision for The Mills assets and brand when we joined the transaction in 2007, and Simon Property Group did an outstanding job of achieving those goals, amid a historic downturn in the property markets. We are confident that The Mills will continue to thrive under Simon's leadership."
Simon continues, "Both of these transactions provide SPG with promising growth prospects. They expand SPG's reach and advance the company's strategy of investing in high-quality retail real estate and expanding our presence in emerging markets both domestically and internationally. Importantly, both the Klépierre and Mills transactions are required to add to FFO immediately."
Simon stated that his company has ample cash on hand as well as current available credit ability to finance these transactions.
SPG's financial advisors on the Klépierre deal are Lazard, J.P. Morgan Securities LLC, and Goldman, Sachs & Co. SPG's financial advisor on The Mills deal is Bank of America Merrill Lynch.