On Monday morning, reports were released that Simon Property Group (SPG) has proposed an offer to acquire Macerich (MAC). Here’s what the deal means for mutual fund investors.
Inside the Deal
Simon Property Group announced that it has sent a letter to Macerich confirming prior discussions to acquire MAC for $22.4 billion, or $91 per share. The deal would include $6.4 billion of MAC’s outstanding debt.
According to reports, Macerich has been talking with its advisers about a potential takeover defense.
The World’s Largest REIT May Be Getting Bigger
Simon Property is the largest REIT in the world with its market value of $57 billion. SPG focuses primarily on enclosed malls, while the majority of MAC’s properties are regional shopping centers. This deal would combine the largest and third largest retail REITs, and would allow SPG to expand its market into the West.
Mutual Fund investors seeking exposure to these companies, as well as the REIT industry as a whole may consider the Vanguard REIT Index (VGSIX). This REIT holds a significant stake in each company.
Mutual Funds to Watch
Investors interested in these companies may be interested in the funds listed below. These funds currently have the largest stakes in the companies.
Simon Property Group
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VGSIX | Vanguard REIT Index | 7.49% |
| VTSMX | Vanguard Total Stock Market Index | 1.72% |
| VFINX | Vanguard 500 Index | 1.09% |
Macerich
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VGSIX | Vanguard REIT Index | 6.74% |
| VMCIX | Vanguard Mid Cap | 1.62% |
| VTSMX | Vanguard Total Stock Market Index | 1.53% |
The Bottom Line
The funds listed above allow investors to gain exposure to SPG and MAC while remaining diversified. Investors interested in retail REITs may also be interested in General Growth Properties (GGP) and Realty Income Corp (O).
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