Posted by: BayAreaComRE | February 24, 2010

General Growth Properties Accepts Deal with Brookfield, Rejects Offers from Simon Properties and Westfield

In a surprising twist, General Growth Properties rejects a $10 billion dollar offer from Simon Properties and another by Westfield to grant Brookfield a 30% stake in the company. While bankruptcy court still has to approve the deal, this certainly culminates a wild week for the bankrupt mall owner.

The Wall Street Journal reported today, “Under the proposal unveiled Wednesday, General Growth and Brookfield envision the split creating one company that will own nearly 200 high-quality malls and a second, smaller company with riskier holdings designed to appeal to investors willing to gamble for higher returns.

The plan, drafted partly by activist investor and General Growth board member William Ackman, is meant to top a $10 billion buyout bid that rival mall owner Simon Property Group Inc. made last week. General Growth is expected to argue that its plan, which is dependent on selling additional stock, offers its shareholders more value than Simon’s all-cash offer.” See the full article here.

The Business Times just released a report, “Chicago-based General Growth (OTC: GGWPQ) owns Kenwood Towne Centre and Florence Mall locally. Toronto-based Brookfield will invest $2.5 billion in cash in the company as part of the plan. General Growth said the deal will give Brookfield a 30 percent stake in the company and will also result in its shareholders getting $15 per share.”

“General Growth last week rejected a $10 billion offer from Indianapolis-based Simon Property Group (NYSE: SPG).” See the full article here.

Trading of General Growth’s stock closed Wednesday at $12.89, down 8 cents, in 4 p.m. trading on the Pink Sheets over-the-counter exchange.

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