______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 1996
SIMON DEBARTOLO GROUP, INC.
- --------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
MARYLAND 1-12618 35-1901999
- -------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
115 WEST WASHINGTON STREET, INDIANAPOLIS, INDIANA 46204
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 636-1600
SIMON PROPERTY GROUP, INC.
- ------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 1
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
------------------------------------
On August 9, 1996, pursuant to an Agreement and Plan of Merger,
dated as of March 26, 1996, as amended, among Simon DeBartolo
Group, Inc., a Maryland corporation (formerly known as Simon
Property Group, Inc.) ("SPG"), Day Acquisition Corp., an Ohio
corporation and a subsidiary of SPG ("Sub"), and DeBartolo
Realty Corporation, an Ohio corporation ("DRC"), Sub was merged
with and into DRC (the "Merger"). The Merger and certain other
related matters were approved by stockholders of SPG and
shareholders of DRC at their special meetings held on August 7,
1996 and August 6, 1996, respectively. A copy of the press
release announcing the shareholders' approvals and the closing
of the merger are attached hereto as Exhibit 99.1 and Exhibit 99.2,
respectively.
Pursuant to the Merger, each outstanding share of common stock
of DRC, par value $0.01 per share, other than shares as to
which dissenters' rights have been perfected, was converted
into the right to receive 0.68 share of common stock of SPG,
par value $0.0001 per share (the "Common Stock"), and cash for
any fractional shares. As a result, shareholders of DRC
received approximately 37.9 million shares of Common Stock
pursuant to the Merger.
Substantially the same information required by this Current
Report on Form 8-K concerning the Merger was previously
reported in SPG's Prospectus/Joint Proxy Statement which formed
a part of the Company's Registration Statement on Form S-4
(333-06933) as amended and declared effective by the Securities
and Exchange Commission on June 28, 1996 (the "Registration
Statement"), which is incorporated by reference herein to the
extent appropriate.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
---------------------------------
a) and b) Updated pro forma financial information and interim financial
statements of DRC follow beginning at page F-1.
c) Exhibits
The items listed on the Exhibit Index attached hereto
are filed with or made a part of this Current Report on Form 8-K.
<PAGE> 2
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Date: August 26, 1996
SIMON DeBARTOLO GROUP, INC.
By /s/ James M. Barkley
---------------------------
Name: James M. Barkley
Title: Secretary/General Counsel
<PAGE> 3
INDEX TO PRO FORMA FINANCIAL INFORMATION
AND FINANCIAL STATEMENTS
Simon DeBartolo Group, Inc. (formerly Simon Property Group, Inc.) Page
- ----------------------------------------------------------------- ----
Pro Forma (Unaudited) Combined Condensed Balance Sheet
as of June 30, 1996 F-2
Pro Forma (Unaudited) Combined Condensed Statements of
Operations for the six month period ended June 30, 1996
and for the year ended December 31, 1995 F-3
Notes and Management's Assumptions to Unaudited Pro Forma
Combined Condensed Financial Information F-4
Business Acquired
- -----------------
Unaudited interim financial statements of DRC as of June 30, 1996
and for the three month and six month periods then ended F-7
<PAGE> F
Simon DeBartolo Group, Inc. Pro Forma
Combined Condensed Financial Information
(Unaudited)
The accompanying financial statements present the unaudited pro forma
combined condensed Balance Sheet of the Simon DeBartolo Group, Inc.
("SDG") as of June 30, 1996 and the unaudited pro forma combined
condensed Statements of Operations of SDG for the six-month period ended
June 30, 1996 and for the year ended December 31, 1995.
The unaudited pro forma combined condensed Balance Sheet as of June
30, 1996 is presented as if the Merger and the Other Transactions had
occurred on June 30, 1996. The unaudited pro forma combined condensed
Statements of Operations for the six-month period ended June 30, 1996
and for the year ended December 31, 1995 are presented as if the Merger
and the Other Transactions had occurred as of January 1, 1995 and
carried forward through June 30, 1996.
Preparation of the pro forma financial information was based on
assumptions deemed appropriate by the management of Simon Property
Group, Inc. ("SPG") and DeBartolo Realty Corporation ("DRC"). The
assumptions give effect to the Merger and the Other Transactions under
the purchase method of accounting in accordance with generally accepted
accounting principles and the combined entity qualifying as a REIT,
distributing all of its taxable income and, therefore, incurring no
federal income tax expense during the periods presented. The pro forma
financial information is unaudited and is not necessarily indicative of
the results which actually would have occurred if the transactions had
been consummated at the beginning of the periods presented, nor does it
purport to represent the future financial position and results of
operations for future periods. The pro forma information should be read
in conjunction with the historical financial statements of SPG and DRC.
<PAGE> F-1
<TABLE>
Simon DeBartolo Group, Inc.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
As of June 30, 1996
(In thousands)
(Unaudited)
Merger and
Other
Transactions Pro Forma
SPG DRC Pro Forma Combined
(Historical) (Historical) Adjustments Condensed
------------- ------------- ------------- -------------
<S> <C> <C> <C> <S> <C>
ASSETS:
Investments in properties,
partnerships and joint
ventures, net $2,243,674 $1,349,147 $1,636,203 (B) $5,229,024
Cash, cash equivalents and
short-term investments 65,556 45,938 (34,400) (C) 77,094
Receivables 141,520 40,754 (26,934) (D) 155,340
Note receivable from the
SPG, LP Management Company 91,478 -- -- 91,478
Other assets 120,734 118,136 (59,312) (E) 179,558
---------- ---------- ---------- ----------
Total assets $2,662,962 $1,553,975 $1,515,557 $5,732,494
========== ========== ========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY:
LIABILITIES:
Mortgages and other notes
payable $2,178,539 $1,479,515 $22,423 (F) $3,680,477
Accounts payable, accrued
expenses and other
liabilities 194,998 80,035 (2,801) (G) 272,232
Investment in the SPG, LP
Management Company 19,740 -- -- 19,740
---------- ---------- ---------- ----------
Total liabilities 2,393,277 1,559,550 19,622 3,972,449
---------- ---------- ---------- ----------
LIMITED PARTNERS' INTEREST
IN THE OPERATING
PARTNERSHIP 68,525 (2,126) 576,877 (H) 643,276
STOCKHOLDERS' EQUITY:
Preferred stock 99,923 -- -- 99,923
Common stock 7 553 (549) (H) 11
Capital in excess of par
value 269,757 (4,002) 919,607 (H) 1,185,362
Accumulated deficit (162,131) -- -- (162,131)
Unamortized restricted
stock award (6,396) -- -- (6,396)
------------- ------------- ------------- -------------
Total stockholders'
equity 201,160 (3,449) 919,058 1,116,769
------------- ------------- ------------- -------------
Total liabilities
and stockholders'
equity $2,662,962 $1,553,975 $1,515,557 $5,732,494
========== ========== ========== ==========
The accompanying notes and management's assumptions are an integral part of this statement.
</TABLE>
<PAGE> F-2
<TABLE>
Simon DeBartolo Group, Inc.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Six-Months Ended June 30, 1996
(In thousands, except share and per share amounts)
(Unaudited)
Merger and
Other
Transactions Pro Forma
SPG DRC Pro Forma Combined
(Historical) (Historical) Adjustments Condensed
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Minimum rent $159,076 $114,086 $ 1,700 (A) $274,862
Overage rent 10,751 5,635 -- 16,386
Tenant reimbursements 93,696 45,456 -- 139,152
Other income 19,681 11,455 -- 31,136
-------- -------- --------- --------
Total revenue 283,204 176,632 1,700 461,536
-------- -------- --------- --------
EXPENSES
Property and other
operating expenses 107,773 66,484 (5,000) (B) 169,257
Depreciation and
amortization 51,307 32,432 5,821 (C) 89,560
Merger and Other
Transaction expenses -- 10,200 (10,200) (D) --
-------- -------- --------- --------
Total expenses 159,080 109,116 (9,379) 258,817
-------- -------- --------- --------
OPERATING INCOME 124,124 67,516 11,079 202,719
INTEREST EXPENSE 79,134 60,759 (7,437) (E) 132,456
-------- -------- --------- --------
INCOME BEFORE MINORITY
INTEREST 44,990 6,757 18,524 70,271
MINORITY PARTNERS'
INTEREST (1,175) (325) -- (1,500)
-------- -------- --------- --------
INCOME BEFORE
UNCONSOLIDATED ENTITIES 43,815 6,432 18,524 68,771
INCOME FROM UNCONSOLIDATED
ENTITIES 3,985 8,236 -- 12,221
-------- -------- --------- --------
INCOME OF THE OPERATING
PARTNERSHIP 47,800 14,668 18,524 80,992
LESS LIMITED PARTNERS'
INTEREST IN THE OPERATING
PARTNERSHIP 16,883 5,593 7,219 (F) 29,695
-------- -------- --------- --------
NET INCOME FROM CONTINUING
OPERATIONS 30,917 9,075 11,305 51,297
PREFERRED DIVIDENDS 4,062 -- -- 4,062
-------- -------- --------- --------
NET INCOME FROM CONTINUING
OPERATIONS AVAILABLE TO
COMMON STOCKHOLDERS $ 26,855 $ 9,075 $ 11,305 $ 47,235
======== ======= ======== ========
NET INCOME FROM CONTINUING
OPERATIONS PER SHARE OF
COMMON STOCK $0.46 $0.49
==== ====
WEIGHTED AVERAGE SHARES (G)
OUTSTANDING 58,471,201 96,355,721
========== ==========
The accompanying notes and management's assumptions are an integral part of this
statement.
</TABLE>
<PAGE> F-3
<TABLE>
Simon DeBartolo Group, Inc.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
(In thousands, except share and per share amounts)
(Unaudited)
Merger and
Other
Transactions Pro Forma
SPG DRC Pro Forma Combined
(Historical) (Historical) Adjustments Condensed
<S> <C> <C> <C> <S> <C> <S>
REVENUE -------- -------- ------ --------
Minimum rent $307,849 $205,056 $3,400 (A) $516,305
Overage rent 23,278 12,924 -- 36,202
Tenant reimbursements 191,535 82,147 -- 273,682
Other income 30,995 32,530 -- 63,525
-------- -------- ----- --------
Total revenue 553,657 332,657 3,400 889,714
-------- -------- ----- --------
EXPENSES
Property and other 209,782 118,498 (10,000) (B) 318,280
operating expenses
Depreciation and 92,739 58,603 11,641 (C) 162,983
amortization
-------- -------- -------- --------
Total expenses 302,521 177,101 1,641 481,263
-------- -------- -------- --------
OPERATING INCOME 251,136 155,556 1,759 408,451
INTEREST EXPENSE 150,224 124,567 (23,678) (E) 251,113
-------- -------- -------- --------
INCOME BEFORE MINORITY
INTEREST 100,912 30,989 25,437 157,338
MINORITY PARTNERS'
INTEREST (2,681) 1,029 -- (1,652)
GAIN ON SALE OF ASSET 1,871 5,460 -- 7,331
-------- -------- -------- --------
INCOME BEFORE
UNCONSOLIDATED ENTITIES 100,102 37,478 25,437 163,017
INCOME FROM UNCONSOLIDATED
ENTITIES 1,403 8,865 -- 10,268
-------- -------- -------- --------
INCOME OF THE OPERATING
PARTNERSHIP 101,505 46,343 25,437 173,285
LESS LIMITED PARTNERS'
INTEREST IN THE
OPERATING PARTNERSHIP 40,297 18,715 8,675 (F) 67,687
-------- -------- -------- --------
NET INCOME FROM CONTINUING
OPERATIONS 61,208 27,628 16,762 105,598
PREFERRED DIVIDENDS 1,490 -- -- 1,490
-------- -------- -------- --------
NET INCOME FROM CONTINUING
OPERATIONS AVAILABLE TO
COMMON STOCKHOLDERS $ 59,718 $ 27,628 $ 16,762 $ 104,108
======= ======= ======= ========
NET INCOME PER
SHARE OF COMMON STOCK $ 1.08 $ 1.12
===== =====
WEIGHTED AVERAGE SHARES
OUTSTANDING 55,312,078 93,196,598 (G)
========== ==========
The accompanying notes and management's assumptions are an integral part of this
statement.
</TABLE>
<PAGE> F-4
Simon DeBartolo Group, Inc.--Notes and Management Assumptions to Pro
Forma Combined Condensed Financial Information (Unaudited, in thousands,
except share and per share amounts)
1. Accounting Treatment
The exchange of DRC Common Stock for SPG Common Stock, the merger, and
transfer by SPG and the SPG Limited Partners' interests in the SPG
Operating Partnership to the DRC Operating Partnership under the
contribution agreement technically result in a reverse merger for
financial reporting purposes. In substance, DRC and the DRC Limited
Partners' interests in the DRC Operating Partnership are being acquired
and accordingly have been adjusted to fair value in connection with the
application of purchase accounting. The interests transferred by SPG
and SPG Limited Partners to DRC Operating Partnership have been
appropriately reflected at historical cost.
2. Adjustments To Pro Forma Combined Condensed Balance Sheet
(A) Certain reclassifications have been made to the SPG and DRC
historical balance sheets to conform to the desired pro forma
combined condensed balance sheet presentation.
(B) Represents adjustments to record the Merger and the Other
Transactions in accordance with the purchase method of accounting,
based upon an assumed purchase price of $1,512,960 assuming a market
value of SPG Common Stock of $24.375 (which was the closing price of
SPG's Common Stock on August 9, 1996), and the Exchange Ratio of 0.68
as follows:
Value of DRC Common Stock (55,712,529
shares outstanding immediately prior to
the Merger) and 34,203,623 DRC Operating
Partnership interests multiplied by the
Exchange Ratio and the market value of SPG
Common Stock $1,490,360
Merger and the Other Transactions costs 22,600
(see below)
----------
$1,512,960
==========
Estimated fees and expenses related to the
Merger and the Other Transactions, as
follows:
Advisory fees $11,000
Legal and accounting 6,200
Severance and relocation costs 19,000
--------
36,200
Less DRC expenses (13,600)
--------
SPG transaction costs $22,600
========
Adjustment to reflect investment in
properties, partnerships and joint ventures,
net at fair value:
Purchase price (see above) $1,512,960
Historical book value of DRC (equity)
deficit acquired as of the Effective Time:
Historical book value of the DRC
Operating Partnership 5,575
To adjust equity for the Stay Bonus
and to reflect accelerated vesting of
accrued compensation in accordance
with the terms of the Merger and the
Other Transactions 5,599
To reflect DRC's expenses associated
with the Merger and the Other
Transactions of $13,600 less $10,200
recognized as expense in the six-month
period ended June 30, 1996 ($1,800 was
paid with the balance of $8,400
accrued) 3,400
Adjustments to reflect certain assets and liabilities
of DRC at fair value:
Receivables (see Note (D)) 26,934
Other assets (see Note (E)) 59,312
Mortgages and other notes
payable (see Note (F)) 22,423
------
Adjustment required to reflect investment in
properties, partnerships and joint ventures,
net at fair value $1,636,203
=========
(C) To reflect the decrease in cash and cash
equivalents due to the estimated Merger and
the Other Transactions costs, including
expenses of DRC, of $36,200 less cash payments
made of $1,800 $(34,400)
========
(D) To reflect the adjustment to eliminate DRC's deferred
asset related to the straight-lining of rent related
to leases $(26,934)
========
(E) To reflect the following adjustments to other assets:
To eliminate deferred financing, interest rate buy-
downs and similar costs related to mortgages and
other notes payable and organization costs $(53,536)
To adjust DRC's historical basis in the DRC
Management Company to estimated fair market value of
$15,000 13,428
To eliminate deferred leasing costs (19,204)
--------
$(59,312)
========
(F) To record a premium required to adjust
mortgages and other notes payable to fair
value using a discount rate estimated on an
instrument by instrument basis $22,423
=======
(G) To reflect the following adjustments to
accounts payable, accrued liabilities and other liabilities:
1. To record accrued compensation expense
related to the Stay Bonus ($8,467), less
the portion which vests immediately for
which DRC Common Stock was issued
($1,325) and to reflect the accelerated
vesting of accrued compensation
settled with DRC Common Stock ($1,543) $ 5,599
2. To eliminate accrued DRC Merger and the Other
Transactions Costs paid in (C) above (8,400)
-------
$(2,801)
=======
(H) To adjust DRC's shareholders' equity and the DRC Limited
Partners' interests to reflect the issuance of 37,884,520 shares of
SPG Common Stock and the conversion of the DRC Limited Partners'
interests in the DRC Operating Partnership into Units in the
Operating Partnership at the Exchange Ratio (assuming that there
were 55,712,529 shares of DRC Common Stock and 34,203,623 DRC
Limited Partners' interests outstanding immediately prior to the
Effective Time) with an assumed value of $24.375 per share and per
unit (which was the closing price of SPG's Common Stock on August 9,
1996), in exchange for substantially
all of the outstanding DRC Common Stock and DRC Interests, as
follows:
<TABLE>
Total equity
Limited of the
Total common Partners' operating
stockholders' interest in partnership
Capital in equity before the before
Common excess of Accumulated unrestricted Operating preferred
Stock par value deficit stock award partnership units
------- ---------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Value of Shares and
Interests Acquired $ 4 $ 923,431 $ -- $ 923,435 $566,925 $1,490,360
Historical Value of
SPG 7 269,757 (162,131) 107,633 68,525 176,158
--- ---------- ---------- ---------- -------- ----------
Combined Equity 11 1,193,188 (162,131) 1,031,068 635,450 1,666,518
==============================================================================================
Pro Forma Ownership 61.4% 38.6% 100.0%
===== ===== ======
Pro Forma Equity 11 1,185,362 (162,131) 1,023,242 643,276 1,666,518
Less Historical Value
of SPG 7 269,757 (162,131) 107,633 68,525 176,158
Less Historical Value
of DRC 553 (4,002) -- (3,449) (2,126) (5,575)
------ ---------- ---------- ---------- -------- ----------
Pro Forma Adjustments $(549) $ 919,607 $--------- $ 919,058 $576,877 $1,495,935
====== ========== ========== ========== ======== ========
</TABLE>
<PAGE> F-5
3. Adjustments To Pro Forma Combined Condensed Statements of Operations
Immediately prior to the Merger and the Other Transactions, DRC will expense
$8,467 in connection with the Stay Bonus which has not been included in the Pro
Forma Combined Condensed Statements of Operations. DRC will also incur $13,600
of expenses in connection with the Merger and the Other Transactions, of which
$10,200 has been accrued as of June 30, 1996, which have not been included in
the Pro Forma Combined Condensed Statements of Operations.
For the Six For the Year
Months Ended Ended
June 30, December 31,
1996 1995
------------ ------------
(A) To recognize revenue from straight-lining
rent related to leases which will be
reset in connection with the Merger and
the Other Transactions $ 1,700 $ 3,400
====== ======
(B) To reflect cost savings to eliminate
duplicative public company costs and
other identified redundancies which have
been estimated based upon historical
costs for those items as a result of the
Merger and the Other Transactions $(5,000) $(10,000)
======== =========
(C) To reflect the increase in depreciation as
a result of recording the investment
properties of DRC at acquisition value
versus historical cost and utilizing an
estimated useful life of 35 years offset
by the decrease in amortization expense
as a result of the elimination of
deferred leasing costs $5,821 $11,641
====== =======
(D) To reflect the elimination of Merger and
the Other Transactions related costs
expensed during the six-month period
ended June 30, 1996 $10,200 $ --
======= =====
(E) To reflect the following adjustments to
interest expense:
(1) To reflect the elimination of
amortization of deferred mortgage
costs related to DRC written-off in
connection with the Merger and the
Other Transactions $(5,062) $(18,929)
(2) To reflect the amortization of the
premium required to adjust mortgages
and other notes payable to fair
value (2,375) (4,749)
-------- ---------
$(7,437) $(23,678)
======== =========
(F) To adjust the allocation of the Limited
Partners' interest in the net income of
the Operating Partnership, after
consideration of the preferred unit
distribution. The Partners' pro
forma weighted average ownership interest
for the six months ended June 30, 1996
and for the year ended December 31, 1995
was 38.6% and 39.4% , respectively $7,219 $8,675
====== ======
(G) The pro forma weighted average common
shares outstanding is computed as follows:
SPG Historical Weighted Average Shares
Outstanding 58,471,201 55,312,078
Issuance of shares of SPG Common Stock
in connection with the Merger and the
Other Transactions (assuming that there
are 55,712,529 shares of DRC Common
Stock outstanding immediately prior to
the Effective Time) 37,884,520 37,884,520
---------- ----------
96,355,721 93,196,598
========== ==========
<PAGE> F-6
<TABLE>
DEBARTOLO REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands except share data)
As of As of
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Assets:
Investment properties (Note 4) $ 1,968,344 $ 1,793,663
Less accumulated depreciation 632,762 574,338
----------- -----------
Cash and cash equivalents 32,486 25,851
Restricted cash (Note 3) 12,477 13,910
Short term investments 975 14,057
Accounts receivable, less allowance for
doubtful accounts of $9,031 and
$10,070 in 1996 and 1995 40,754 39,103
Investments in and advances to
nonconsolidated joint ventures
(Notes 4 and 5) 61,872 116,725
Minority interest in capital deficits
of consolidated joint ventures 34,456 25,496
Deferred charges and prepaid expenses 83,680 77,103
----------- -----------
$ 1,602,282 $ 1,531,570
=========== ===========
Liabilities and Shareholders' Equity:
Liabilities:
Mortgages and notes payable (Note 4) $ 1,479,515 $ 1,348,573
Accounts payable and accrued expenses 51,779 38,810
Dividends and distributions payable 28,256 28,225
Deficits in nonconsolidated joint
ventures (Notes 4 and 5) 48,307 71,147
----------- -----------
1,607,857 1,486,755
----------- -----------
Commitments and contingencies -- --
Limited Partners' interest in
Operating Partnership (2,126) 17,142
Shareholders' Equity (Deficit):
Preferred Stock, $.01 par value,
10,000,000 shares authorized, no
shares issued and outstanding -- --
Common Stock, $.01 par value,
175,000,000 shares authorized,
55,496,757 shares in 1996, 55,329,162
shares in 1995, issued and outstanding 553 553
Additional paid-in capital -- 27,120
Accumulated deficit (4,002) --
Total Shareholders' Equity (Deficit) (3,449) 27,673
----------- -----------
$ 1,602,282 $ 1,531,570
=========== ===========
See accompanying notes
</TABLE>
<PAGE> F-7
<TABLE>
DEBARTOLO REALTY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended June 30,
1996 1995
-------- --------
<S> <C> <C>
Revenues:
Minimum rents $ 57,532 $ 52,957
Tenant recoveries 22,416 20,090
Percentage rents 2,841 2,667
Other 5,417 5,509
-------- --------
Total revenues 88,206 81,223
-------- --------
Expenses:
Shopping Center Expenses:
Property operating 9,841 8,383
Repairs and maintenance 6,958 6,614
Real estate taxes 9,555 8,323
Advertising & promotion 1,782 1,413
Management expenses 2,021 1,400
Provision for doubtful accounts 904 879
Ground leases 744 638
Other 1,470 1,739
-------- --------
Total shopping center expenses 33,275 29,389
Deferred stock compensation expense 52 52
Interest expense 31,235 30,465
Depreciation and amortization 16,907 14,188
Merger Expenses (Note 4) 10,200 --
-------- --------
91,669 74,094
-------- --------
Gain on sale of assets -- 18
Income from nonconsolidated joint
ventures (Notes 4 and 5) 4,755 2,427
Minority partners' interest in
consolidated joint ventures (390) 252
-------- --------
Income before Limited Partners' interest
In the Operating Partnership 902 9,826
Limited Partners' interest in the
Operating Partnership 344 (4,049)
-------- --------
Net income $ 558 $ 5,777
======== ========
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE (Note 6) $ 0.01 $ 0.12
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING (000's) 55,616 48,982
======== ========
See accompanying notes
</TABLE>
<PAGE> F-8
<TABLE>
DEBARTOLO REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
Six Months Ended June 30,
1996 1995
--------- ---------
<S> <C> <C>
Revenues:
Minimum rents $ 114,086 $ 106,191
Tenant recoveries 45,456 39,844
Percentage rents 5,635 5,632
Other 11,455 8,785
--------- ---------
Total revenues 176,632 160,452
--------- ---------
Expenses:
Shopping Center Expenses:
Property operating 19,695 16,962
Repairs and maintenance 15,130 12,791
Real estate taxes 18,338 16,806
Advertising & promotion 3,778 2,761
Management expenses 4,143 2,797
Provision for doubtful accounts 1,502 1,493
Ground leases 1,450 1,207
Other 2,343 2,776
------- ---------
Total shopping center expenses 66,379 57,593
Deferred stock compensation expense 105 105
Interest expense 60,759 61,338
Depreciation and amortization 32,432 28,348
Merger expenses (Note 4) 10,200 --
--------- ---------
169,875 147,384
--------- ---------
Gain on sale of assets -- 3,779
Income from nonconsolidated joint
ventures (Notes 4 and 5) 8,236 4,182
Minority partners' interest in
consolidated joint ventures (325) 536
--------- ---------
Income before extraordinary item 14,668 21,565
Extraordinary item (Note 4) 9,191 --
--------- ---------
Income before Limited
Partners' interest 23,859 21,565
Limited Partners' interest in the
Operating Partnership (9,097) (8,891)
--------- ---------
Net income $ 14,762 $ 12,674
========= =========
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE (Note 6):
Income before extraordinary item $ 0.28 $ 0.26
Extraordinary item (0.01) ---
--------- ---------
Net income $ 0.27 $ 0.26
========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING (000's) 55,613 48,982
========= =========
See accompanying notes
</TABLE>
<PAGE> F-9
<TABLE>
DEBARTOLO REALTY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Six Months Ended June 30,
1996 1995
--------- ---------
<S> <C> <C>
Cash Flow From Operating Activities:
Net income $ 14,762 $ 12,674
Adjustments to reconcile net income to net cash
provided by Operating Activities:
Amortization of formation costs 4,838 6,531
Amortization of interest rate
protection agreements and deferred
loan costs 224 1,556
Gain on sale of assets -- (3,779)
Depreciation and amortization 32,432 28,348
Extraordinary item (9,191) --
Deferred stock compensation expense 105 105
Minority partners' interests in
consolidated joint ventures 325 (536)
Limited Partners' interest in the
Operating Partnership 9,097 8,891
Income from nonconsolidated joint ventures (8,236) (4,182)
Decrease in restricted cash 1,433 7,746
Decrease (increase) in short term
investments 13,082 (7,333)
Decrease in accounts receivable 1,214 2,805
Decrease (increase) in prepaid
expenses and other 1,317 (4,074)
Increase in accounts payable and
accrued expenses 16,794 8,144
------- -------
Net Cash Provided By Operating Activities 78,196 56,896
------- -------
Cash Flows From Investing Activities:
Additions to investment properties (36,146) (22,274)
Cash paid for tenant allowances (3,735) (2,144)
Purchase of partnership interest (5,375) --
Additions to deferred charges for
lease costs and other (3,640) (1,612)
Distributions from nonconsolidated
joint ventures 36,811 11,058
Advances to and investments in
nonconsolidated joint ventures (12,055) (888)
Net proceeds from sale of assets 307 3,750
-------- --------
Net Cash Used In Investing Activities (23,833) (12,110)
-------- --------
Cash Flows From Financing Activities:
Proceeds from issuance of debt 41,904 15,263
Scheduled principal payments on mortgages (3,301) (3,340)
Other payments on debt (30,298) (9,545)
Proceeds from dividend reinvestment plan 50 --
Loan costs paid (294) (444)
Minority partner distributions (1,600) (127)
Distributions to Limited Partners (21,571) (21,526)
Dividends paid (34,909) (30,660)
Decrease (increase) in affiliate
receivables 2,291 499
-------- --------
Net Cash Used in Financing Activities (47,728) (49,880)
-------- --------
Net (Decrease) Increase in Cash 6,635 (5,094)
Cash and Cash Equivalents:
Beginning of period 25,851 38,899
-------- --------
End of period $ 32,486 $ 33,805
======== ========
Supplemental Information:
Interest Paid $ 53,878 $ 50,254
======== ========
Supplemental schedule of non-cash and financing
activities:
Step-up in connection with acquisition of
additional interest in joint venture $ 7,296 $ --
======== ========
Historical cost basis of net investment
properties consolidated as a result of
acquisitions of additional interests in
joint ventures $121,245 $ --
======== ========
Mortgages on those properties consolidated
as a result of acquisitions of additional
interests in joint ventures $136,009 $ --
======== ========
Historical cost basis of net investment
property disposed $ (4,040) $ --
======== ========
Mortgage extinguishment relating to
property disposition $(13,372) $ --
======== ========
Acquisition of certain businesses of
Property Manager $ 4,020 $ --
======== ========
See accompanying notes
</TABLE>
<PAGE> F-10
DEBARTOLO REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and Dollars in Thousands)
Note 1 - Organization and Ownership
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting solely of normal recurring matters) necessary for a fair
presentation of the consolidated financial statements for these interim periods
have been included. The results for the interim period ended June 30, 1996 are
not necessarily indicative of the results that may be expected for the full
fiscal year. These financial statements should be read in conjunction with the
DeBartolo Realty Corporation December 31, 1995 audited consolidated financial
statements and notes thereto included in its annual report on Form 10-K for the
year ended December 31, 1995 filed with the Securities and Exchange Commission
and Management's Discussion and Analysis of Financial Condition and Results of
Operations.
DeBartolo Realty Corporation, (together with its subsidiaries and operating
affiliates, sometimes referred to as the "Company"), is an Ohio corporation
which operates as a self-administered and self-managed real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended. Through its
majority-owned managing general partnership interest in DeBartolo Realty
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership")
and indirectly, interests in DeBartolo Capital Partnership, a Delaware general
partnership, the Company is engaged in the ownership, development, management,
leasing, acquisition and expansion of super-regional and regional malls and
community shopping centers.
The Company was formed to continue and expand the shopping mall ownership,
management and development business of The Edward J. DeBartolo Corporation
("EJDC") in a portfolio which, as of June 30, 1996, consisted of 50 super-
regional and regional malls (the "DeBartolo Malls"), 11 community centers and
land held for future development (collectively, the "DeBartolo Properties").
The Company completed its initial public offering of securities (the "IPO") in
April, 1994. At June 30, 1996, the Company was the sole general partner of and
owned a 61.9% interest in the Operating Partnership. As of June 30, 1996, EJDC
and certain affiliates (collectively, the "DeBartolo Group") and certain
current and former employees of EJDC, along with JCP Realty, Inc. ("JCP"), own
the remaining 38.1% interest in the Operating Partnership.
In addition, the Operating Partnership owns 100% of the non-voting preferred
stock and a non-controlling common stock interest (5%) in DeBartolo Properties
Management, Inc. (the "Property Manager") which provides certain architectural,
design, construction and other services to substantially all of the DeBartolo
Properties, as well as, certain other regional malls and community shopping
centers owned by third parties.
Note 2 - Basis of Presentation
The financial statements of the Company are presented on a consolidated basis.
Properties which are controlled through majority ownership have been
consolidated and all significant intercompany transactions and accounts have
been eliminated. Properties where the Company owns less than a majority
interest have been accounted for under the equity method. One property, which
is owned 2% by the Operating Partnership, is accounted for under the cost
method.
The Operating Partnership owns 5% of the voting common stock and all of the
nonvoting preferred stock of the Property Manager. The Company accounts for the
investment in the Property Manager under the equity method.
Certain prior year amounts have been reclassified to conform to the current year
presentation.
Note 3 - Restricted Cash
Cash is restricted primarily for renovations and redevelopment of the 17
DeBartolo Properties in connection with a securitized commercial pass-through
certificate issuance simultaneously with the IPO.
Note 4 - Mergers, Acquisitions and Dispositions
The Company entered into an Agreement and Plan of Merger, dated as of March 26,
1996 (the "Agreement"), among Simon Property Group, Inc., a Maryland corporation
("SPG"), its merger subsidiary and the Company, pursuant to which the Company
agreed to merge with the merger subsidiary. The Agreement provides for the
exchange of all outstanding Company common stock for SPG common stock, $0.0001
par value (the "SPG Common Stock"), at an exchange ratio of 0.68 shares of SPG
Common Stock for each share of Company common stock. The merger and other
related transactions were approved by shareholders of both companies and were
closed on August 9, 1996. Shareholders of the Company received approximately
37.9 million shares of SPG common stock valued at $24.375 per share. During the
six-month period ended June 30, 1996, the company incurred $10,200 of
underwriting, legal, accounting and other expenses associated with the merger.
These costs were charged to expense.
During January, 1996, the Property Manager acquired partnership interests of
33 1/3% and 25% in two joint ventures, respectively, from an unrelated joint
venture partner. As a result, the Company effectively owns 65% and 74% of these
joint ventures and includes the financial position and results of operations and
cash flows of these joint ventures in its consolidated financial statements.
Effective March 31, 1996, the Company acquired an additional 10% partnership
interest in Miami International Mall. As a result, the Company owns 60% of this
joint venture and includes the financial position and results of operations and
cash flows in its consolidated financial statements effective April 1, 1996.
Effective January 1, 1996, the Company acquired the management, leasing and
certain other operating divisions of the Property Manager. The operating
results of these divisions are included in the Company's consolidated financial
statements net of eliminated intercompany transactions. The Property Manager
continues to provide architectural, engineering and construction services for
the Company.
The Company transferred ownership of one property to its lender, as of March 1,
1996, fully satisfying the property's mortgage note payable. This property no
longer met the Company's criteria for its ongoing strategic plan. The Company
has recognized an extraordinary gain on this transaction of $9.2 million. The
Operating Partnership's share of this property's net income (loss) for 1993,
1994 and 1995 was $9, ($760) and ($513), respectively. The Operating
Partnership's share of this property's cash generated before debt payments and
capital expenditures ("FFO") for 1993, 1994 and 1995 was $512, ($237) and $48,
respectively.
<PAGE> F-11
Note 5 - Investment in Nonconsolidated Joint Ventures
As a result of the above-discussed acquisitions, the combined Balance Sheet of
the nonconsolidated joint ventures includes the financial position of nine joint
ventures at June 30, 1996 and twelve joint ventures at December 31, 1995. Three
joint ventures, in which the Company acquired additional partnership interests
during the first quarter of 1996, are included in the Company's consolidated
Balance Sheet at June 30, 1996 (see Note 4 above).
June 30, December 31,
1996 1995
--------- -----------
Balance Sheets
Investment properties (net) $ 505,288 $ 599,234
Other assets 42,471 43,094
--------- ---------
Total assets 547,759 642,328
--------- ---------
Mortgages and notes payable 508,341 584,495
Other liabilities 46,980 90,549
--------- ---------
Total liabilities 555,321 675,044
--------- ---------
Accumulated equity (deficit) (7,562) (32,716)
Less: Outside partners' equity (9,740) 180
Advances to nonconsolidated joint
ventures 30,867 78,474
--------- ---------
Net surplus in nonconsolidated
joint ventures $ 13,565 $ 45,578
========= =========
Net surplus (deficits) in
nonconsolidated joint ventures
is presented in the accompanying
consolidated balance sheets as
follows:
Investments in nonconsolidated
joint ventures $ 31,005 $ 38,251
Advances to nonconsolidated
joint ventures 30,867 78,474
--------- ---------
Total investments in and
advances to nonconsolidated
joint ventures 61,872 116,725
Deficits in nonconsolidated
joint ventures (48,307) (71,147)
--------- ---------
$ 13,565 $ 45,578
========= =========
The combined statements of operations for the nonconsolidated joint ventures
include the operating results of ten joint ventures for the three month period
ended March 31, 1996, nine joint ventures for the three months ended June 30,
1996 and twelve joint ventures in 1995. The operating results of two joint
ventures, in which the Company acquired additional partnership interest in
January 1996, are included in the Company's consolidated operating statement.
The operating results of one joint venture, in which the Company acquired
additional partnership interest effective March 31, 1996, are included in the
Company's consolidated operating statement effective April 1, 1996.
Six Months Ended June 30,
1996 1995
Statements of Operations
Revenues:
Minimum rents $ 41,183 $ 46,571
Tenant recoveries 19,549 21,971
Percentage rents 2,251 2,860
Other 5,238 3,294
-------- --------
Total revenues 68,221 74,696
-------- --------
Expenses:
Shopping Center Expenses:
Property operating 6,197 6,968
Repairs and maintenance 5,050 5,704
Real estate taxes 8,124 9,367
Advertising and promotion 1,833 2,019
Management fees to affiliate 2,329 2,477
Provision for doubtful accounts 554 467
Ground leases 60
Other 539 674
--------- --------
24,626 27,736
Interest expense 20,150 28,604
Depreciation and amortization 10,559 11,814
--------- ---------
55,335 68,154
Net income $ 12,886 $ 6,542
========= =========
The Operating Partnership's share of:
Revenues less shopping center expenses $ 19,982 $ 20,275
Interest expense 7,333 9,866
Depreciation, amortization and other 4,413 6,227
--------- ---------
Net income $ 8,236 $ 4,182
========= =========
<PAGE> F-12
Note 6 - Earnings Per Common Share and Common Share Equivalent
Earnings per share and common share equivalent is based on the weighted average
number of common stock and common stock equivalents outstanding for the six
months ended June 30, 1996. Common stock awarded but not yet issued under the
deferred stock plan (42,400 shares) and the Company's long-term incentive plan
(80,400 shares) have been considered common stock equivalents for the six months
ended June 30, 1996.
Note 7 - Dividends
The Company paid a dividend of $0.315 per share on July 22, 1996 for the period
of April 1, 1996 through June 28, 1996. On August 9, 1996, the Company paid a
prorated dividend of $0.1454 per share for the period June 29, 1996 through
August 9, 1996.
<PAGE> F-13
EXHIBIT INDEX
-------------
Sequentially
Exhibit No. Description Numbered Page
- ---------- ----------- -------------
2.1 Agreement and Plan of Merger
(the "Merger Agreement")
(dated as of March 26, 1996,
among SPG, Sub and DRC
(included as Annex I to the
Prospectus/Joint Proxy
Statement referred to in
Exhibit 20.1).
2.2 Amendment No. 1 to the Merger
Agreement, dated as of June 26,
1996 (included as Annex I to
the Prospectus/Joint Proxy
Statement referred to in
Exhibit 20.1).
2.3 Amendment No. 2 to the Merger
Agreement, dated as of
August 8, 1996.
20.1 Prospectus/Joint Proxy
Statement dated June 28, 1996
(incorporated by reference to
the Prospectus/Joint Proxy
Statement dated June 28, 1996,
forming a part of the
registrant's Registration
Statement on Form S-4 (333-
06933), as amended and declared
effective by the Securities and
Exchange Commission on June 28,
1996).
99.1 Press Release dated August 7,
1996.
99.2 Press Release dated August 9,
1996
<PAGE> 4
AMENDMENT NO. 2 TO
THE AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 2 (this "Amendment") to the
Merger Agreement (as defined below), dated as of August 8,
1996, is hereby entered into by and among Simon Property
Group, Inc., a Maryland corporation ("Parent"), Day
Acquisition Corp., an Ohio corporation and a direct
subsidiary of Parent ("Sub"), and DeBartolo Realty
Corporation, an Ohio corporation (the "Company").
Capitalized terms not otherwise defined have the meanings
set forth in the Merger Agreement.
(a) the Board of Directors of each of Parent, Sub
and the Company have approved the merger of Sub with and
into the Company (the "Merger"), upon terms and subject to
the conditions set forth in the Agreement and Plan of
Merger, dated as of March 26, 1996, among Parent, Sub and
the Company, as amended (the "Merger Agreement"); and
(b) Parent, Sub and Company now wish to further
amend the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and for good and
valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. Amendment. (a) Simon hereby agrees
that following consummation of the Merger, in accordance
with and subject to the terms and conditions set forth in
the Merger Agreement (including, without limitation, the
issuance of the opinions described in Section 6.2(e) and
6.3(e) of the Merger Agreement), to make all payments
(including settlements relating thereto) with respect to
Dissenting Shares, any provision of the Merger Agreement or
the Ohio Statute to the contrary notwithstanding. It is
hereby further agreed that such payments shall not
constitute Economic Losses for purposes of Section 6.2(a)
of the Merger Agreement. In furtherance of these and
other agreements, the Merger Agreement is hereby amended
and modified as follows:
(1) Section 2.1(d) of the Merger Agreement is
amended by substituting the word "Parent's"
for "Company's" in the last sentence of the
section.
(2) Section 2.2(d)(i) of the Merger Agreement is amended
by replacing the third sentence with the following:
"The Company shall, prior to the Effective Time,
deposit into escrow with the Exchange Agent sufficient
funds to pay such dividends in respect of the Common
Stock. The dividends payable hereunder to holders of
Common Stock shall be paid upon presentation of the
certificates of Common Stock for exchange in accordance
with this Article II."
(b) In the event that the Merger is approved, but the
Required Vote is not obtained, effective upon such approval
Exhibit G-2 to the Merger Agreement (Form of Amended and Restated
Regulations of SD Property Group, Inc.) is hereby amended by
replacing the word "thirteen" in the first sentence of Article
II, Section 2 with the word "nine"
Section 2. Effectiveness. The amendments to the Merger
Agreement provided for in this Amendment shall become effective
as of the date hereof upon the execution and delivery of one or
more counterparts of this Amendment duly executed by Parent, Sub
and the Company.
Section 3. Miscellaneous. (a) Except as expressly
provided herein, the execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any rights,
powers or remedies of Parent, .Sub and the Company under the
Merger Agreement, nor constitute a waiver of any provision of the
Merger Agreement. Except as expressly amended hereby, the Merger
Agreement shall be unchanged and remain in full force and effect
and the Merger Agreement as amended hereby is ratified and
confirmed.
(b) This Amendment shall for a part of the Merger
Agreement for all purposes, and each party to the Merger
Agreement shall be found and shall be inured of the benefits
hereby.
(c) This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which
taken together shall constitute one and the same instrument and
any of the parties hereto may execute this Amendment by signing
any such counterpart.
(d) THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF, EXCEPT TO
THE EXTENT THAT THE MERGER OR OTHER TRANSACTIONS CONTEMPLATED
HEREBY ARE REQUIRED TO BE GOVERNED BY THE OHIO STATUTE.
(e) From and after the effectiveness of this
Amendment as provided in Section 2 hereof, all references to the
Merger Agreement in the Merger Agreement and in any other
agreement in connection with the Transactions shall be deemed to
be references to the Merger Agreement after giving effect to
this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
SIMON PROPERTY GROUP, INC.
By /s/ David Simon
-----------------
Name: David Simon
Title: CEO
DAY ACQUISITION CORP.
By /s/ David Simon
------------------
Name: David Simon
Title: President
DeBARTOLO REALTY CORPORATION
By
----------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
SIMON PROPERTY GROUP, INC.
By
---------------------------
Name:
Title:
DAY ACQUISITION CORP.
By
----------------------------
Name:
Title:
DeBARTOLO REALTY CORPORATION
By /s/ Richard S. Sokolov
------------------------
Name: Richard S. Sokolov
Title:
SIMON
PROPERTY
GROUP
CONTACTS:
Shelly Doran 317.685.7330 Investors
Billie Scott 317.263.7148 Media
FOR IMMEDIATE RELEASE
SIMON PROPERTY GROUP SHAREHOLDERS APPROVE MERGER WITH DeBARTOLO
REALTY CORPORATION
Indianapolis, Indiana - August 7, 1996...Simon Property Group, Inc.
(NYSE:SPG) announces that its shareholders have approved the merger
agreement with DeBartolo Realty Corporation (NYSE:EJD) by 81.2%,
or 50.6 million, of the 62,369,748 shares entitled to vote.
Approval of the merger required approval by a majority of the shareholders
of SPG. Concurrent with approval of the merger, SPG shareholders also
approved certain amendments to its Articles of Incorporation, among other
things, to increase the size of its Board of Directors from nine to
thirteen and to authorize a new Class C stock. These amendments required
the approval of 80% or more of its outstanding shares, which was
obtained.
Separately, at a special shareholders' meeting yesterday, the shareholders
of EJD approved the merger with more than 83% of the shares voting in
favor.
The merger is expected to be completed on Friday, August 9, 1996. A
special dividend of $0.1515 per share of SPG common stock will be paid
to holders of record on Thursday, August 8, 1996.
Simon Property Group owns, develops, manages, leases, expands and acquires
regional malls, comity shopping centers and specialty and mixed-use
properties throughout the United States. It currently owns or has an
interest in 123 properties which consist of existing regional malls,
community shopping centers and specialty and mixed-use properties
containing an aggregate of 63 million square feet of gross leasable area
in 29 states, of which approximately 37.7 million square feet is
Company-owned. Simon Property Group, together with its affiliated
management company, currently manages approximately 76 million square
feet of gross leasable area in retail and mixed-use properties. On
July 31, 1996, SPG opened Cottonwood Mall, a one million square foot
super-regional mall in Albuquerque, New Mexico. In March of 1996,
Simon Property Group and DeBartolo Realty Corporation announced
a plan to merge the two companies.
-end-
CONTACTS:
Shelly Doran 317.685.7330 Investors
Billie Scott 317.263.7148 Media
FOR IMMEDIATE RELEASE
SIMON PROPERTY GROUP AND DeBARTOLO REALTY CORPORATION
COMPLETE MERGER
Indianapolis, Indiana- August 9, 1996...Simon Property Group, Inc.
(NYSE:SPG) and DeBartolo Realty Corporation (NYSE:EJD) today announced
that they have completed a merger of the two companies. The combined
company, Simon DeBartolo Group, Inc. (NYSE:SPG), unites two of the
founding families of the regional mall business and creates the largest
public real estate company in North America with a total market
capitalization of $7.5 billion.
David Simon, Chief Executive Officer of Simon DeBartolo Group, stated,
"The amount of effort expended by individuals from both organizations to
complete the closing of this transaction was exceptional. The level of
cooperation and professionalism exhibited bodes well for the future of
Simon DeBartolo Group."
"We remain thoroughly convinced that, through this merger, we have
created a new real estate company of unparalleled size, talent and
financial strength," said Rick Sokolov, President and Chief
Operating Officer of Simon DeBartolo Group. "It offers enhanced
opportunities for future growth in addition to the cost savings
and operating efficiencies which will be of immediate benefit to
the company. Our integration and transition plan will begin
immediately and should be fully in place by mid-1997."
Under the terms of the merger, DeBartolo shareholders will receive 0.68
share of Simon common stock for each share of DeBartolo common stock
owned. DeBartolo Realty Corporation stock will be delisted after the
close of trading today. Stock of the combined company, Simon DeBartolo
Group, Inc., will begin trading on Monday, August 12, 1996, under the
existing SPG ticker symbol.
Simon DeBartolo Group owns, develops, manages, leases, expands and
acquires regional malls, community shopping centers and specialty and
mixed-use properties throughout the United States. It currently owns or
has an interest in 184 properties which consist of existing regional
malls, community shopping centers and specialty and mixed-use properties
containing an aggregate of 110 million square feet of gross leasable area
in 33 states. Simon DeBartolo Group, together with its affiliated
management company, manages approximately 127 million square feet of
gross leasable area in retail and mixed-use properties.
-end-
