Chicago-based mall giant General Growth owns properties like Faneuil Hall Marketplace in Boston, right. On Thursday, General Growth’s rival Simon Property Group raised its bid to acquire General Growth. (AP Photo/Michael Dwyer, file)
Dow Jones Newswires-Wall Street Journal | Mall giant Simon
Property Group Inc. late Thursday raised its bid to acquire General Growth Properties Inc. in a “last and final” effort to sway its rival from going forward with a competing offer to finance its exit from bankruptcy.
In a proposal now valued at $33.5 billion, Simon offered $6.5 billion, or $20 per share, for General Growth’s equity. Simon also would pay $7 billion to eliminate General Growth’s unsecured debt and would assume roughly $20 billion of mortgages on General Growth’s malls. The revised bid improves on Simon’s buyout offer on Sunday of $5.8 billion, or
$18.25 per share.
“We look forward to engaging seriously and immediately with you and your advisors and counsel so that we can effectuate a transaction that is clearly in the best interest of your shareholders,” Simon Chairman and Chief Executive David Simon wrote in a letter sent to General Growth’s board on Thursday.
General Growth already favors a $6.5 billion offer from Brookfield Asset Management Inc. and other investors to finance its exit from bankruptcy in exchange for two thirds of the company’s stock.
General Growth was to appear in front of U.S. Bankruptcy Judge Allan Gropper on Friday to get his approval for the Brookfield deal, but it remained unclear late Thursday if that hearing would be postponed. General Growth didn’t return calls seeking comment.
Simon has structured its offers to match Brookfield’s. In particular, both suitors pledge to split General Growth into two companies: A larger company that owns most of General Growth’s 204 U.S. malls and a smaller entity that holds its riskier assets such as its residential-development business.
Combining Simon and General Growth would create a retail-property giant with more than 500 properties in the U.S. Simon, based in Indianapolis, is the largest U.S. retail landlord with 321 properties. General Growth, based in Chicago, is second with 204.
