Simon Spin-Off Set to be Publicly TradedPosted: Updated:
Indianapolis-based Simon Property Group Inc. (NYSE: SPG) has announced the date its spin-off will officially go public. Washington Prime Group Inc. is set to be listed on the New York Stock Exchange May 28. It will trade under the symbol "WPG."
May 7, 2014
INDIANAPOLIS, Ind. (May 6, 2014) - Simon Property Group, Inc. (NYSE:SPG) ("Simon") today announced that its Board of Directors has declared the distribution of all of the common shares of Washington Prime Group Inc. ("Washington Prime") to its stockholders. Following the distribution, Washington Prime will be an independent, publicly-traded company listed on the New York Stock Exchange ("NYSE") under the symbol "WPG". Simon common stock will continue to trade on the NYSE under the ticker symbol "SPG".
The distribution of Washington Prime common shares is expected to occur on May 28, 2014 by way of a pro rata special dividend to Simon stockholders. Each Simon stockholder will be entitled to receive one Washington Prime common share for every two shares of Simon common stock held as of the close of business on May 16, 2014, the record date for the distribution. Fractional shares of Washington Prime will not be distributed, and instead Simon stockholders will receive cash in lieu of any fractional shares they would otherwise be entitled to receive in the distribution. Simon stockholders are not required to take any action to receive Washington Prime common shares in the distribution, and they will not be required to surrender or exchange their Simon shares.
Persons who hold common limited partnership interests in Simon's subsidiary operating partnership, Simon Property Group, L.P., will be entitled to receive one unit of limited partnership interest in Washington Prime's subsidiary operating partnership, Washington Prime Group, L.P., for every two units owned in Simon Property Group, L.P. Limited partners of Simon Property Group, L.P. will receive cash in lieu of any fractional units of Washington Prime Group, L.P.
The distribution is intended to qualify as tax-free for U.S. federal income tax purposes. However, cash received by Simon stockholders in lieu of fractional common shares of Washington Prime may be taxable to such holders. Washington Prime intends to elect and qualify to be taxed as a real estate investment trust for U.S. federal income tax purposes.
The completion of the spin-off is subject to certain conditions including, without limitation, the Securities and Exchange Commission (the "SEC") declaring effective Washington Prime's Registration Statement on Form 10 ("Form 10"), Washington Prime's common stock being accepted for listing on the NYSE and other conditions set forth in the Separation and Distribution Agreement filed as an exhibit to the Form 10.
BofA Merrill Lynch and Goldman, Sachs & Co. are serving as exclusive financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Simon in connection with the spin-off.
Trading of Simon and Washington Prime Common Shares before the Distribution Date
Washington Prime common shares distributed in the distribution will be issued in book-entry form, which means that no physical share certificates will be issued.
In connection with the distribution, beginning on or shortly before the record date and continuing up to and including through the distribution date, Simon expects that there will be three trading markets:
In the "regular way" market, shares of Simon common stock will trade with an entitlement to the Washington Prime common shares distributed on the distribution date under the symbol "SPG". Holders who sell Simon common stock in the regular way market on or before the distribution date will also sell their right to receive Washington Prime common shares.
In the "ex-distribution" market, shares of Simon common stock will trade without the right to the Washington Prime common shares distributed on the distribution date under the symbol "SPG.WI". Holders who sell Simon common stock in the ex-distribution market on or before the distribution date will retain their right to receive Washington Prime common shares in the distribution.
In the "when-issued" market, the right to receive Washington Prime common shares distributed on the distribution date will trade under the symbol "WPG.WI". Holders who sell the right to Washington Prime common shares in the when-issued market on or before the distribution date will retain their shares of Simon common stock.
Simon anticipates that "regular-way" trading of Washington Prime common shares under the symbol "WPG" will begin on the first trading day following the distribution date, which is expected to be May 28, 2014.
Simon stockholders are encouraged to consult their financial advisors and tax advisors regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling Simon common stock on or prior to the distribution date and the applicability and effect of any U.S. federal, state, local and foreign tax laws.
Supplemental Materials and Website
Supplemental information on the transaction, including Washington Prime's most recent amendment to its Form 10, is available at investors.simon.com. This press release will also be furnished to the SEC in a current report on Form 8-K. Shortly after the record date for the distribution, Simon expects to mail an information statement to all Simon stockholders entitled to receive the distribution of Washington Prime common shares. The information statement is an exhibit to the Form 10 and will describe Washington Prime, including risks of owning Washington Prime common shares and other details regarding the separation and distribution.
We routinely post important information online at our investor relations website, investors.simon.com. We use this website, press releases, SEC filings, quarterly conference calls, presentations and webcasts to disclose material, non-public information in accordance with Regulation FD. We encourage members of the investment community to monitor these distribution channels for material disclosures. Any information accessed through our website is not incorporated by reference into, and is not a part of, this document.
About Simon Property Group
Simon Property Group, Inc. (NYSE: SPG) is an S&P 100 company and a global leader in the retail real estate industry. We currently own or have an interest in more than 325 retail real estate properties in North America, Asia and Europe comprising approximately 242 million square feet. We are headquartered in Indianapolis, Indiana and employ approximately 5,500 people in the U.S. For more information, visit simon.com.
About Washington Prime
Washington Prime Group Inc. will own or have an interest in 54 strip centers and 44 smaller enclosed malls across the United States, comprising approximately 53 million square feet. For more information, visit washingtonprime.com.
Source: Simon Property Group Inc.