Simon Property Group of
Indianapolis priced 5.8M shares
of common stock.

INDIANAPOLIS-Simon Property Group announced today the pricing of 5.8 million shares of common stock offered by the Melvin Simon Family Enterprises Trust as a selling stockholder. The pricing results in gross proceeds of $943.7 million, and represent the settlement between the late Melvin Simon’s estate and Simon Property Group.

According to a release issued by Simon Property Group, the shares brought to market represent the Trust’s entire direct ownership in the company as well as ownership in Simon Property Group LP, the company’s operating partnership subsidiary. BofA Merrill Lynch acted as the sole book-running manager for the offering. The conversion of Melvin Simon’s ownership units allows his family’s trust to diversify its assets, preserving the proceeds for all of the trust’s ultimate beneficiaries.

What wasn’t mentioned by the release, however, is that the settlement, which calls for converting approximately 6.5 million in Simon’s ownership units for the 5.8 million common shares, effectively removes the publicly traded Simon Property Group from an ongoing legal battle in Hamilton County over Melvin Simon’s more than $2 billion estate. The fight has involved Simon’s widow, Bren Simon and his children from an earlier marriage; Deborah Simon, Cynthia Simon-Skjodt and Simon Property Group CEO David Simon. In that case, a jury trial is scheduled for July, 2013.

The stock conversion ends up saving the company more than $100 million, while increasing the estate’s take by 50% more than it would have been if Bren Simon had succeeded in her attempts to convert the trust units months after Simon’s death in late 2009.  When she attempted to convert the units, Simon Property Group intervened, arguing that the estate proceeds disputes amounted to a lien on the ownership units, thus preventing conversion.