("Simon Criticizes General Growth's Stance In Letter To CEO,"
published at 5:19 p.m. EST, misspelled Adam Metz's last name, in
the second paragraph. A corrected version follows.)
DOW JONES NEWSWIRES
General Growth Properties Inc.'s (GGWPQ) frosty reception to a
$10 billion takeover offer by rival Simon Property Group Inc. (SPG)
led to the latter questioning General Growth's commitment to its
stakeholders.
In a letter addressed to General Growth Chief Executive Adam
Metz, Simon Property Chief Executive David Simon questioned General
Growth's proposed non-disclosure agreement, which it said was "not
constructive."
Among a number of grievances, Simon said the draft offered by
General Growth included forbidding Simon Property from disclosing
any aspect of communications between the companies, as well as
prohibiting Simon Property from speaking with, or reaching an
agreement with, any third parties regarding a possible
transaction.
On the first point, Simon said his company doesn't share General
Growth's belief that stakeholders should be excluded from
information which it says could lead to the "best recovery
available to them."
Simon added on the second point that Simon Property already has
contacted potential co-investors for the deal. According to people
close to the situation, Simon already has lined up deep-pocketed
investors--including Blackstone Group LP and sovereign wealth
funds--to potentially join its bid for General Growth.
"By continuing to request the unreasonable restrictions set
forth in your proposed non-disclosure agreement, you render your
'process' a charade from the start by seeking to exclude the most
logical and capable acquirer," Simon wrote Friday.
Simon Property Tuesday unveiled its takeover bid for General
Growth, which collapsed under a huge debt load last year and was
forced to seek bankruptcy protection. General Growth has responded
that it will examine multiple options for exiting bankruptcy,
including soliciting additional buyout offers and possibly selling
new stock to raise needed capital.
A General Growth spokesman wasn't immediately available for
comment.
Investors and analysts, meanwhile, are expecting Simon Property
to sweeten its bid with other suitors possibly in the wings.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com