General Growth Properties Obtains Court Approval for Bidding Procedures & Issuance of Warrants Related to Enhanced Investment...
May 07 2010 - 7:05PM
Business Wire
General Growth Properties, Inc. (NYSE: GGP) announced today that
the U.S. Bankruptcy Court has approved bidding procedures and the
issuance of warrants to serve as compensation for the financial
commitments to be provided pursuant to the revised $6.55 billion
equity investment and $2 billion capital backstop offer from
affiliates of Brookfield Asset Management, Pershing Square Capital
Management and Fairholme Funds. The Company will continue to
consider competitive proposals and expects to select its plan for
emergence from bankruptcy in early July.
“After careful consideration, the Board of Directors agreed that
the revised proposal from this investment group represents the best
initial sponsor proposal to foster a process that maximizes the
enterprise value of GGP,” said Adam Metz, Chief Executive Officer
of GGP. “This proposal serves as an insurance policy for GGP by
providing the Company with the capital it requires to emerge from
bankruptcy, while at the same time allowing GGP to continue
soliciting higher and better financing and strategic offers
pursuant to the bid procedures approved by the Bankruptcy
Court.”
The Official Committee of General Growth's Equity Committee
supports the revised Brookfield-led proposal and the relief
requested in the motion.
Principal
Changes
The principal changes from the recently revised proposal
submitted by the Brookfield-led investors include:
- Pershing Square has agreed to
eliminate its interim warrants entirely. The remaining warrants to
be granted to Brookfield and Fairholme as part of the transaction
will vest over time as previously announced; and
- Upon emergence and subsequent to
the spin-off of General Growth Opportunities at a contemplated
value of $5.00 per GGO share, the strike price of the permanent
warrants has been increased to $10.75 per share for Brookfield and
remains at $10.50 per share for Pershing Square and Fairholme, an
increase from the previous $10.00 per share.
“We are pleased that the Court has approved the bidding
procedures and warrants associated with the enhanced investment
proposal from Brookfield, Pershing Square and Fairholme, which we
expect will lead to a process that maximizes value for our
stakeholders,” said Thomas H. Nolan, Jr., President and Chief
Operating Officer of GGP. “As majority investors in GGP,
Brookfield, Fairholme and Pershing’s interests would be wholly
aligned with the Company to maximize shareholder value. We expect
those three parties to actively work to increase enterprise value,
as evidenced by the exciting strategic relationship agreement in
the new Brookfield-led proposal that will provide General Growth
with valuable corporate opportunities. This proposal provides the
best opportunity to maximize current and future stockholder value
while, at the same time, protecting the Company and its creditors
on the downside.”
Full text of the proffer submitted today to the U.S. Bankruptcy
Court on behalf of Mr. Nolan is available at
http://www.ggp.com/Company/Pressreleases.aspx?prid=510.
UBS Investment Bank and Miller Buckfire & Co., LLC served as
financial advisors to General Growth Properties, and Weil, Gotshal
& Manges LLP acted as legal counsel to the company.
ABOUT GGP
GGP currently has ownership interest in or management
responsibility for more than 200 regional shopping malls in 43
states, as well as ownership in planned community developments and
commercial office buildings. The Company’s portfolio totals
approximately 200 million square feet of retail space and includes
over 24,000 retail stores nationwide. The Company’s common stock is
traded on the New York Stock Exchange under the symbol GGP.
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