December 8, 2009
Simon Property Group (SPG: 167.22 +1.01%) has purchased outlet owner and operator Prime Outlets for $2.33B. Big news, except the company paid 80% of the price in cash, and the rest in partnership units, plus assumption of debt.
The deal gives Indianapolis-based Simon Property an additional 22 retail outlet centers, increasing its total to more than 60. It will pay $700 million for closely held Prime Outlets, 80 percent in cash and 20 percent in common operating partnership units, Simon Property said in a statement.
Chief Executive Officer David Simon amassed about $3.7 billion in cash in the past year to fund acquisitions and last month hired Lazard Ltd. to consider purchasing the assets of mall owner General Growth Properties Inc. In an interview in March, Simon said he wanted to “hoard” cash to take advantage of opportunities in the market.
Good move nonetheless as outlets will likely out perform the rest of the retail market.
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