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|Simon Property Group Announces Plan To Spin Off Its Strip Center Business And Smaller Enclosed Malls|
SpinCo's mission will be to own stable, quality strip centers and malls that effectively serve the communities in which they are located. SpinCo is expected to initially own or have an interest in 54 strip centers and 44 malls (each of the malls generating annual net operating income ("NOI") of approximately
The new company, which will have an independent, dedicated executive management team and conservatively capitalized balance sheet, will be well-positioned to deliver internal growth through active asset management and re-developments and external growth through acquisitions and selective new developments. SpinCo intends to pursue an investment grade credit rating from the major credit rating agencies.
Key transaction highlights:
Mr. Simon commented, "Today, on the twentieth anniversary of Simon's initial public offering, we are pleased to announce this significant transaction which we believe will unlock the potential of the strip centers and malls to be owned by SpinCo. We believe we are creating a new company that has both a strong Simon heritage and all of the requisite tools to grow its business and succeed. At the same time, this transaction allows Simon to focus on our global portfolio of larger malls,
Mr. Sokolov commented, "I am excited about this transaction and look forward to serving as SpinCo's Chairman. There are many very attractive investment opportunities in SpinCo's targeted asset classes which it will have the ability to pursue. As future members of SpinCo's Board of Directors and significant shareholders in SpinCo, both David and I are dedicated to putting the right management team in place to successfully execute SpinCo's growth-oriented business strategy and deliver attractive total returns to shareholders."
The spin-off will be effected through a pro rata special distribution to Simon shareholders.
BofA Merrill Lynch and
Conference Call Details
Supplemental Materials and Website
Supplemental information on the transaction, including a copy of the investor presentation, is available at investors.simon.com. This press release has also been furnished to the
We routinely post important information online at our investor relations website, investors.simon.com. We use this website, press releases,
Statements in this presentation that are not historical may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such factors include, but are not limited to: uncertainties as to the timing of the spin-off and whether it will be completed, the possibility that various closing conditions for the spin-off may not be satisfied or waived, the expected tax treatment of the spin-off, the possibility that third party consents required to transfer certain properties in the spin-off will not be received, the impact of the spin-off on the businesses of the Company and the spin-off company, the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, changes in the value of investments in foreign entities, the ability to hedge interest rate risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of the Company's status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the
Per Share Information
Information shown on a per share basis uses Simon's weighted average shares outstanding as of
This press release includes forward-looking statements regarding estimated non-GAAP measures of initial year net operating income, or NOI, and initial year funds from operations, or FFO, for SpinCo, based upon the assets currently expected to be included in SpinCo. While these forward-looking figures are only estimates (including that they are subject to the factors noted above under "Forward-Looking Statements"), consistent with reporting as to its own results of operations, Simon believes that NOI and FFO are helpful to investors because they are widely recognized measures of the performance of real estate investment trusts and provide a relevant basis for comparison among REITs. Our estimation of these non‐GAAP measures with respect to SpinCo may not be the same as similar measures would be reported by other REITs. These non‐GAAP financial measures should not be considered as alternatives to net income as a measure of operating performance or to cash flows computed in accordance with GAAP as a measure of liquidity, nor are they indicative of cash flows from operating and financial activities. Because certain terms of the separation transaction have not yet been determined, including as to the balance sheet of SpinCo, it is not reasonably possible at this time to provide a comparable forward-looking estimation of initial year net income for SpinCo or a reconciliation to the estimated initial year NOI and FFO figures included in this press release. Historical GAAP financial information for SpinCo will be included in the Form 10 registration statement relating to the spin-off. More information on NOI and FFO is available at investors.simon.com.
About Washington Prime
Washington Prime Group Inc. will own or have an interest in 54 strip centers and 44 smaller enclosed malls across the United States, comprising approximately 53 million square feet. For more information, visit washingtonprime.com
Investor Contact: Liz Zale, 212-745-9623, LZale@Simon.com; Media Contact: Hugh Burns (Sard Verbinnen & Co.), 212-687-8080, HBurns@sardverb.com