Exclusive: Starboard challenges U.S. mall owner Macerich's board - sources

By Greg Roumeliotis, Liana B. Baker and Carl O'Donnell

(Reuters) - Activist hedge fund Starboard Value LP nominated directors this week to challenge the board of directors of U.S. shopping mall owner Macerich Co (NYSE: MAC), people familiar with the matter said on Wednesday.

Macerich is the latest mall operator to come under pressure from activist investors during a downturn in the brick-and-mortar retail sector. Taubman Centers Inc (NYSE: TCO), another shopping center operator, has attracted activist hedge funds, including Elliott Management Corp.

Starboard may replace the majority of Macerich's 10-member board, the sources said, asking not to be identified because the matter is confidential.

Macerich and Starboard declined to comment.

Macerich shares were up 4.4 percent at $58.59 in late afternoon trading in New York, giving the company a market capitalization of $8.85 billion.

Macerich owns 53 million square feet of real estate consisting primarily of 48 regional U.S. shopping centers. The company rejected a $16.8 billion bid from rival Simon Property Group Inc (NYSE: SPG) in 2015 and has struggled since then, as thousands of U.S. stores have closed under pressure from e-commerce retailers such as Amazon.com Inc (NASDAQ: AMZN).

Third Point LLC, another activist hedge fund, disclosed a stake in Macerich in November. Land & Buildings Investment Management LLC, an activist hedge fund specializing in the real estate sector, also owns Macerich stock.

In the latest sign of consolidation in the sector, commercial real estate company Brookfield Property Partners LP (NASDAQ: BPY) said last week it would acquire the 66 percent of GGP Inc (NYSE: GGP) that it does not already own in a cash-and-stock deal valuing GGP, one of the largest owners and operators of U.S. shopping centers, at about $15.3 billion.

In December, Europe's biggest property firm Unibail-Rodamco agreed to buy U.S. and UK mall operator Westfield Corp (NASDAQ: WFD) for $16 billion.

(Reporting by Greg Roumeliotis, Liana B. Baker and Carl O'Donnell in New York; Editing by David Gregorio and Leslie Adler)

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