Simon Property Group Inc. (SPG) committed a $1.5 billion line of
credit to its pursuit of General Growth Properties Inc. (GGP) and
proposed two possible directors for General Growth's board as it
outlined an improved proposal to pull its bidding target from
bankruptcy.
The mall giant said it has agreed to backstop a $1.5 billion
credit line necessary for General Growth to emerge from bankruptcy,
"thus eliminating a great risk and uncertainty inherent in" a rival
proposal from a group led by Brookfield Asset Management (BAM).
Simon also proposed that former Ernst & Young partner Dale
Anne Reiss and Wharton real-estate professor Peter Linneman join
General Growth's board, saying it would agree to limits of its
governance rights, including capping voting rights at 20% and
holding the right to designate two of nine General Growth board
members. Brookfield's plan includes three board nominations.
In a letter to General Growth, Simon called its two board
nominations "distinguished professionals with substantial
real-estate expertise who are not affiliated with Simon."
Late Wednesday, Simon revised a recent offer to finance General
Growth's bankruptcy exit, adding several new investors that would
collectively put up an additional $1.1 billion.
Simon, which in February made a rejected $10 billion bid to buy
General Growth out of bankruptcy outright, in recent days offered
to match a $6.5 billion offer from the Brookfield-led group to help
finance General Growth's exit from bankruptcy as a standalone
company.
Simon Chief Executive David Simon was set to meet General
Growth's board and top executives in Chicago Thursday to discuss
the proposal further, people familiar with the plans told the Wall
Street Journal on Wednesday.
Shares of Simon declined 0.8% to $86.33 in recent trading, while
General Growth was down 6cents to $15.36. The stocks have risen
8.2% and 32%, respectively, so far this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;