Rouse Co. adds eight ritzy malls to holdings

It and two other firms split Rodamco assets in $5.3 billion deal

May 04, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

The Rouse Co. officially added eight premier shopping malls to its portfolio yesterday, after the biggest deal it has ever made formally closed.

Columbia-based Rouse and two other firms split the assets of Rodamco North America NV in a $5.3 billion deal announced in January. Rouse's portion was about $1.5 billion.

"It's closed; we bought them," said David L. Tripp, a Rouse vice president and director of investor relations.

In addition to acquiring the malls, four of which Rouse already partly owned, the company also gained an interest in other noncore assets, including a New York office building. Rouse has deals to sell some of those assets, Tripp said.

Rouse sought the malls to bolster its move upscale. For years, the company has been shedding unproductive properties and those that do not dominate their markets.

Analysts have largely supported the acquisition of Rodamco malls, despite the high cost, because such a large number of well-performing properties are rarely for sale.

According to summary of Rouse's performance provided yesterday by Legg Mason Wood Walker Inc., the Rodamco portfolio "should be a significant earnings driver in the second half of 2002 and 2003."

Legg Mason maintains a "buy" rating on Rouse's stock, partly because of the "high quality portfolio of regional malls."

Locally, Rouse owns malls in Columbia, Towson, Owings Mills, White Marsh and Baltimore. Rouse also plans to open the Village of Merrick Park in Coral Gables, Fla., and unveil an expansion of Fashion Show Mall in Las Vegas by the end of the year.

To pay for the Rodamco malls, Rouse sold 16 million shares in January, raising $457 million.

It also obtained an 18-month, $870 million loan from a Banc of America Securities affiliate.

Malls acquired by Rouse are: Collin Creek in Plano, Texas; Lakeside Mall in Sterling Heights, Mich.; North Star Mall in San Antonio; Oakbrook Center in Oakbrook, Ill.; Perimeter Mall in Atlanta; The Streets at Southpoint in Durham, N.C.; Water Tower Place in Chicago; and Willowbrook in Wayne, N.J.

The other buyers in the Rodamco deal are Simon Property Group Inc. and Westfield America Trust.

Rouse's stock rose 9 cents to $33.29 yesterday.

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