Santa Monica mall operator Macerich Co. might find itself up for sale this holiday season.

Last week, another shopping mall developer, Simon Property Group Inc. in Indianapolis, announced that it had built up a 3.6 percent stake in Macerich and indicated it wants more of the company, which had investors speculating about a potential takeover.

And that sent Macerich’s shares soaring. The stock jumped 12 percent during the week ended Nov. 19 to close at $76.58, its highest close in seven years. Nearly all of the movement happened Nov. 19, the day after Simon’s announcement. Macerich was one of the biggest gainers on the LABJ Stock Index. (See Page 50.)

In its statement, Simon also said that it might request that Macerich waive an existing “excess share” provision that prevents any outside party from owning more than 5 percent of the stock – indicating that Simon could be planning to increase its stake.

That request came just two days after Macerich waived that provision for another investor as part of a deal that, coincidentally, could make Macerich a more attractive acquisition target.

Cadillac Fairview Corp., a subsidiary of the Ontario Teachers’ Pension Plan Board, last week acquired a 10.9 percent in Macerich as part of a stock-swap deal. The pension plan exchanged its 49 percent ownership stake in five Macerich properties for $1.9 billion, which Macerich paid in stock and by assuming debt. As part of the deal, the company waived the excess share provision for the pension board.

One consequence of that transaction is that Macerich’s mall portfolio now has a much cleaner ownership structure – the pension board now owns Macerich stock instead of equity in individual malls. And that structure could be more appealing to a potential acquirer.

Macerich did not respond to the Business Journal’s request for comment.

Premium play

In a Nov. 19 report on the company, a team of analysts at New York finance giant JPMorgan Chase & Co. helmed by Michael Mueller and Anthony Paolone wrote that the announcement could signal that Macerich is primed for a takeover. The analysts don’t think Simon’s interest in Macerich is limited to owning a small piece and sitting back.

“We find it hard to believe that Simon’s move is because it wants to be a passive investor,” they wrote.

The analysts also said Macerich’s West Coast-heavy portfolio could make it a nice complement to Simon, which owns regional malls and outlet centers throughout the country but has its biggest presence in the Midwest, Northeast and Florida.

The companies overlap in certain areas, such as Phoenix and Southern California, where Macerich’s premium malls, including West L.A’s Westside Pavilion and Santa Monica Place, could give Simon a more dominant local market position. Simon owns and operates the Premium Outlets malls in Camarillo and Cabazon.

Jason Lail, an analyst at Charlottesville, Va., research firm SNL Financial, told National Real Estate Investor in New York that Simon’s announcement could start a conversation about buying Macerich.

“It certainly appears that Simon could be interested in acquiring Macerich and it’s a way to strike up that dialogue,” he said.

Macerich has recently underperformed relative to Simon. For the three months ended Sept. 30, Macerich reported occupancy of 95.6 percent and sales of $571 per square foot at its malls. Simon’s numbers were 96.9 percent and $613 a foot.

But Macerich has recently worked to sell off some of its lower-performing assets in what has been a challenging time for malls as a whole, which should make it a more attractive takeover target. Many regional shopping centers have gone out of business as e-commerce continues to gobble up a greater share of retail dollars.

Simon – whose co-founder and chairman emeritus, Herb Simon, owns the National Basketball Association’s Indiana Pacers – and Macerich have both adapted to this new ballgame by loading up on higher-end malls that sell more expensive goods to bigger-spending communities. Malls anchored by a Nordstrom, such as Macerich’s Westside Pavilion, or a Bloomingdale’s, such as Simon’s Fashion Valley in San Diego, are less likely to lose shoppers to the Internet or Wal-Mart than ones whose biggest tenant is a JCPenney or Sears.

With Simon’s malls practically full and very few new malls being built, acquiring a complementary portfolio like Macerich’s might be the perfect stocking stuffer that gives the company more room to grow.