| Follow Us:

Development News

Indie firm to buy Prime Outlets for $2.3B

Indianapolis firm, Simon Property Group, Inc., has agreed to purchase the Baltimore-based Prime Outlets Acquisition Company and its Prime Outlet outle shopping malls for approximately $2.325 billion, including the assumption of Prime Outlets' existing indebtedness and preferred stock.

Under the terms of the agreement, Simon will pay equity consideration of approximately $0.7 billion for the owners' interests in Prime Outlets. The equity consideration to Prime Outlets' owners will generally be comprised of 80% in cash and 20% in SPG common operating partnership units, which will be based on a ten day trading average of SPG common stock shortly before closing, subject to a 10% collar.

Prime Outlets is a leading owner, manager, operator and developer of outlet centers in the U.S. The Prime Outlets portfolio includes 22 high quality outlet centers located in major metropolitan markets such as Washington D.C., Baltimore, MD and San Antonio, TX and popular tourist destinations such as Orlando, FL and Williamsburg, VA. As of June 30, 2009, Prime Outlets' centers were 92 percent occupied and generated annual sales per square foot of approximately $370.

Commenting on the transaction, David Simon, SPG Chairman and Chief Executive Officer, states "Prime Outlets is an excellent opportunity for Simon as it represents a strong strategic fit for our existing Premium Outlet portfolio and enhances our leadership position in the outlet business. Following the completion of this transaction our outlet portfolio will have 63 centers comprising approximately 25 million square feet."

Simon intends to fund the cash portion of the equity consideration using its existing sources of capital. Simon was advised in this transaction by UBS Investment Bank and JP Morgan and was represented by Fried, Frank, Harris, Shriver & Jacobson LLP.

Source: Simon Property Group
Writer: Walaika Haskins

Signup for Email Alerts
Share this page
0
Email
Print
Signup for Email Alerts