SPG Announces Acquisition Of Prime Outlets

Simon Property Group Inc. SPG announced the acquisition of Prime Outlets for $2.3 bn. The recent acquisition reinforces the fact that Goldman has recently upgraded it to a buy on their conviction buy list. Goldman highlighted “several potential catalysts including a dividend increase, further debt paydown, and acquisition opportunities.” Simon Property Group’s EPS estimates were raised for FY10 to $5.50 from $5.40, FY11 to $6.44 from $6.14, and FY12 to $6.65 from $6.35. This has come from the new transaction as well as the debt paydown announced earlier this month. Goldman's Buy rating is maintained “based on attractive valuation and stable growth amid a challenging macro outlook.” Goldman has a 12-month price target of $100 on Simon Property Group. SPG closed yesterday at $90.45.