By Liz Hoffman and Robbie Whelan
Activist investor Jonathan Litt, whose hedge fund seeks to shake
up real-estate companies, has nominated directors to the board of
Macerich Co. following the mall owner's rejection of a $16.8
billion takeover bid.
Mr. Litt's Land and Buildings Investment Management LLC proposed
a slate of four Macerich directors, the investor said in an
interview. He put up the slate Tuesday, the final day of Macerich's
nomination window and the same day the Santa Monica, Calif.,
company rejected a takeover offer from Simon Property Group
Inc.
Mr. Litt objects to some of the defenses Macerich put up to beat
back the bid and believes engaging with Simon may have been a
better course, according to a person familiar with his
thinking.
There is no guarantee Mr. Litt, whose fund manages about $100
million, will wind up running the slate at Macerich's annual
meeting later this spring. He declined to name the proposed
directors.
Land and Buildings owns about 1,000 Macerich shares, according
to a person familiar with the matter. That is small even by the
standards of activist investors--who have managed to effect change
at many companies lately with relatively modest stakes--but is
enough to nominate directors. The success of any effort by Mr. Litt
to win board seats would come down to whether other investors share
his views.
In early March, Simon, which already owned 3.6% of Macerich,
publicly offered to buy the rest for $91 per share. Simon is the
largest U.S. mall owner; Macerich is third.
Macerich rejected the bid, arguing it undervalued the company
and didn't factor in future profits from malls the company is
developing. Macerich also unveiled a number of corporate defenses
meant to stymie Simon, including staggering its board elections so
that only a minority of directors will be up for a vote this
spring.
Simon upped its bid to a "best and final" $95.50 per share late
last month. Macerich rejected that bid Tuesday night, after which
Simon dropped the offer.
Simon, the mall empire run by real estate scion David Simon, has
said it wouldn't run a proxy fight to replace Macerich
directors.
Mr. Litt, a former research analyst at Citigroup Inc., has
emerged as the most prominent activist investor in real-estate
investment trusts, or REITs. He has pushed for shake-ups at
Pennsylvania Real Estate Investment Trust and BRE Properties Inc.,
earning outsize returns for his fund in the process. Last year, he
gained a seat on the board of office landlord Mack-Cali Realty
Corp. Mr. Litt is pushing MGM Resorts International to split its
real-estate assets into a separate company and spin off a Chinese
unit. Mr. Litt is also seeking to replace directors at the casino
giant--as well as at apartment-building owner Associated Estates
Realty Corp. Macerich would be his largest target to date.
Write to Liz Hoffman at liz.hoffman@wsj.com and Robbie Whelan at
robbie.whelan@wsj.com
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