Simon Property Group Announces Two Strategic Acquisitions, Strengthening Domestic and International Footprint

Acquires 28.7% Interest in Leading European Mall Owner and Operator Klépierre from BNP Paribas

 

Acquires Joint Venture Partner Farallon Capital’s Stake in 26 Mills Assets

Both Transactions Expected to be Immediately Accretive to FFO; SPG Increases 2012 FFO and Net Income Guidance

INDIANAPOLIS--(BUSINESS WIRE)--Mar. 8, 2012-- Simon Property Group, Inc. (NYSE: SPG) ("SPG") today announced that it has signed a definitive agreement under which it is acquiring a 28.7% equity stake (54,430,000 shares) in Klépierre (Euronext Paris: LI) from BNP Paribas (Euronext Paris: BNP) for €28.00 per share, or a total transaction value of approximately $2.0 billion (€1.5 billion). SPG will receive payment of Klépierre’s dividend to be declared in April 2012. Klépierre is a Paris-based real estate company that focuses on the ownership, management, and development of shopping centers, retail properties and offices across Continental Europe. Klépierre’s portfolio includes 271 shopping centers in 13 countries, with 50 percent of its properties in France and Belgium, 25 percent in Scandinavia, and the balance in Central and Southern Europe.

David Simon, Chairman and Chief Executive Officer of SPG, said, “We are very excited to become the largest shareholder in Klépierre, which has a collection of unique retail assets in strong markets in Europe. The investment in Klépierre represents an attractive opportunity for SPG as we seek to broaden our global footprint. We have long been admirers of Klépierre, its pan-European footprint and growth potential, and we look forward to working closely with the Klépierre management team.”

As part of the Klépierre transaction, Mr. Simon will become the Chairman of Klépierre’s nine member Supervisory Board. Two additional SPG representatives will join the Klépierre Board as well.

Laurent Morel, Chief Executive Officer of Klépierre, commented, “We are very enthusiastic to have Simon Property Group as a significant investor in Klépierre, which will combine Klépierre’s expertise, strong European presence and development potential with the expertise and leadership of the largest global retail real estate company. Simon’s collaboration with the Klépierre team will be a significant asset in driving the profitable growth of our company.”

Klépierre, a listed real estate company, held assets valued at €16.2 billion at December 31, 2011. Klépierre specializes in designing, managing, and enhancing the value of its real estate assets via its subsidiaries, Ségécé and Steen & Strøm, Scandinavia’s number one owner and manager of shopping centers. Klépierre is listed on Euronext Paris™ and belongs to the SBF 40, CAC Large 60, and EPRA Eurozone indexes.

The Klépierre transaction is expected to close next week. SPG has no current intention to acquire additional shares of Klépierre.

SPG also announced today that it has signed a definitive agreement with its joint venture partner Farallon Capital Management, L.L.C. ("Farallon") under which SPG is acquiring Farallon’s stake in 26 assets of The Mills Limited Partnership (“The Mills”) in a transaction valued at $1.5 billion, which includes repayment of The Mills’ senior loan facility and mezzanine loan, and the retirement of preferred stock. The Mills assets included in this transaction, all of which will continue to be managed by SPG, are listed below.

Mr. Simon added, “The Mills transaction is a compelling opportunity for SPG to expand our investment in a portfolio of assets we know well and already manage, which are well-located in key metropolitan markets, have considerable consumer brand equity and large trade areas, and generate significant cash flow and total sales volumes. We were pleased to have partnered with Farallon since our initial investment in 2007, and we have made significant progress improving The Mills’ assets. We look forward to a continued strengthening of these high-quality, well-positioned properties, and will continue to pursue redevelopment opportunities throughout this portfolio.”

Rocky Fried, Managing Member of Farallon, said “We are extremely gratified by this outcome. When we entered into the transaction in 2007, we had a shared vision for The Mills properties and brand and Simon Property Group did an exceptional job of accomplishing those goals, despite a historic downturn in the property markets. We know that under Simon’s continued stewardship, The Mills will continue to prosper.”

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