Simon Property to acquire Prime Outlets for $2.33 billion

The largest public real estate company and mall owner in the US Simon Property Group Inc., (SPG) is acquiring all the shopping centre outets of Prime Outlets Acquisition Company for $2.325 billion including debt.

The Baltimore-based Prime Outlets is a leading owner, manager, operator and developer of 22 high quality outlet centres located in major metropolitan markets such as Washington D.C., Baltimore, San Antonio, Texas and popular tourist destinations such as Orlando and Williamsburg.

As of June 30 2009, Prime Outlets' centres were 92 per cent occupied and generated annual sales per square foot of approximately $370.

Under the terms of the acquisition, SPG will pay equity consideration of approximately $700 million for the owners' interests in Prime Outlets. The equity consideration to Prime Outlets' owners will generally be comprised of 80 per cent in cash and 20 per cent in SPG's common operating partnership units, which will be based on a ten day trading average of SPG common stock.

David Simon, SPG chairman and CEO said, "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 centres comprising approximately 25 million square feet."

The Indianapolis, Indiana-based SPG is an S&P 500 company and is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centres, The Mills, community/lifestyle centres and international properties.