SANTA MONICA, CA—Simon Property Group's unsolicited bid to acquire fellow mall REIT Macerich Co., based here, may or may not lead to a transaction, although any deal most likely would come at a higher price than the $91 per share SPG offered on Monday. REIT analysts don't see a rival bid coming in for MAC, either, although David Auerbach tells GlobeSt.com we could see more mergers in the sector as a result.

“M&A activity is not dead,” says Auerbach, an institutional REIT trader with Esposito Securities LLC in Dallas. “This could lead to more deals across the landscape. It could force the B and C players to think about potentially getting together” in order to keep with the Joneses.

Although MAC said Monday that its board would review the SPG proposal to buy it for a total of $22.4 billion including the assumption of debt, the company has refused to engage in deal talks with SPG in the past few months. Further, its statement Monday implied that it preferred to continue with its “proven strategic plan,” which has achieved a 186% return for shareholders over the past five years.

Were a deal to happen, however, it wouldn't make the competitive landscape more challenging for smaller REITs. On the contrary, Auerbach says, “I think it makes it more enticing for them. For a lot of the smaller REITs, especially the ones that have done REIT conversions over the past year to try raising their profile, this is actually helping them.”

Both SPG and MAC play big in the luxury retail space. However, Auerbach says that one of Indianapolis-based SPG's greatest strengths is that it's not confined to the high end.  “You've got outlet malls, class C properties and mega-malls” in the SPG portfolio, he says. “They're hitting every single segment of the marketplace.”

The New York Times reported Monday that shares of MAC were trading 6% higher after SPG made its offer public, a pricing direction that suggests bidding will go higher. In a note to investors Monday, Rich Moore at RBC Capital Markets said SPG's offer will need to exceed $100 per share for a deal to come in at a cap rate south of 4.30% nominal.

That being said, Auerbach thinks the SPG proposal has viability in the marketplace. He points to the fact that SPG's stock was also up slightly on Monday. “This is one of the few situations where you see both the acquirer and acquire trading higher,” he tells GlobeSt.com.

Ratings agencies were divided Monday on the impact an acquisition of MAC would have on SPG's rating. Standard & Poor's said its ratings for SPG, include a corporate credit rating of A, were “not immediately affected” by the buyout proposal.

“There is uncertainty surrounding the likelihood an agreement will be executed, and the details of the financing remain unclear,” S&P said in a statement. “However, we believe an acquisition of Macerich would likely create opportunities for Simon to enhance Macerich's lower margins through operating efficiencies,” to include eliminating MAC's overhead, “and property-level enhancements through Simon's strong management and operating platform.”

In contrast, Fitch Ratings saw “negative credit implications” in an SPG takeover of MAC. It would increase SPG's leverage materially above the 5.1x level it maintained as of Dec. 31, 2014 while also lowering the company's unencumbered asset coverage of unsecured debt, Fitch says.

On the plus side, Fitch notes that SPG's plan to sell some of MAC's assets to General Growth Properties post-merger “removes a potential bidder for MAC,' thereby increasing the probability of the deal going through. However, the ratings agency notes, “hostile public-to-public REIT transactions oftentimes pose challenges to the bidder by the target.”