Simon Property Group Inc, the largest U.S. mall owner and operator, said it would pay out most of its dividend in stock, sending its shares down as much as 8.3 percent.Simon reported a 6.5 percent increase in funds from operations (FFO), a performance measure for real estate investment trusts (REITs), and said its board voted to pay a quarterly dividend of 90 cents per share in 10 percent cash and 90 percent stock.
The dividend decision will allow Simon to retain $925 million in cash in 2009. The stock later recovered some ground on word the decision would be reviewed quarterly.
"This decision is not made in response to the current retail environment but it means -- we're being conservative with our capital," Chief Executive David Simon said in a conference call with analysts. "We intend to evaluate this decision each quarter and we've also received the right to pay the dividend entirely in cash if conditions warrant."
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