CHICAGO, Dec. 20, 2011
/PRNewswire/ -- General Growth Properties, Inc. (NYSE: GGP) ("GGP")
announced today its board of directors approved the spin-off of its
subsidiary, Rouse Properties, Inc. ("Rouse Properties").
The spin-off will be completed through a pro rata taxable
dividend of voting common stock of Rouse Properties held by GGP on
Thursday, January 12, 2012 (the
"Distribution Date") to GGP stockholders of record as of the close
of business on the New York Stock Exchange ("NYSE") on Friday, December 30, 2011 (the "Record Date"). On
the Distribution Date, for every share of GGP common stock owned as
of the Record Date, GGP stockholders will receive approximately
0.0375 shares of Rouse Properties' common stock representing a
distribution ratio of 1:26.66. Approximately 35.5 million
shares of Rouse Properties' common stock are expected to be
outstanding immediately following the spin-off. The
distribution of these shares will be made in book-entry form, which
means no physical share certificates will be issued.
Rouse Properties filed an amendment to its Registration
Statement on Form 10 ("Form 10") this morning with the Securities
and Exchange Commission ("SEC"). Exhibit 99.1 to the Form 10
includes information about Rouse Properties' financial results,
business and strategy, and other important information.
As previously disclosed in the Form 10, Rouse Properties had
historical core net operating income of approximately $113.1 million for the nine months ended
September 30, 2011. As further
discussed in the Form 10, this amount does not represent a complete
measure of Rouse Properties' anticipated results as a stand-alone
public company once the spin-off is completed.
On the Distribution Date, Rouse Properties is expected to have
approximately $1.16 billion of debt
outstanding with a weighted average interest rate of approximately
5.6% comprised of approximately $724.0
million of existing mortgage debt and a new three year
senior secured term loan of approximately $433.5 million. The senior secured term loan will
be provided by a syndicate of lenders with Wells Fargo Bank, N.A.,
as administrative agent, and Wells Fargo Securities, LLC, RBC
Capital Markets, LLC, and U.S. Bank National Association as joint
lead arrangers. The senior secured facility also includes a
revolving credit facility in the amount of $50 million. In addition, Rouse Properties
finalized the terms of a three and a half year subordinated
unsecured revolving credit facility with an affiliate of Brookfield
Asset Management, Inc. ("Brookfield") that will provide borrowings on a
revolving basis of up to $100
million.
Rouse Properties entered into a standby purchase agreement with
an affiliate of Brookfield
relating to the previously announced rights offering that Rouse
Properties plans to commence following the completion of the
spin-off, pursuant to which Brookfield has agreed to purchase at the
rights offering price of $15.00 per
share (i) its pro rata share of the common stock of Rouse
Properties and (ii) any remaining shares of Rouse Properties common
stock not otherwise subscribed for in the rights offering.
ADDITIONAL INFORMATION ABOUT THE SPIN-OFF
No fractional shares of Rouse Properties common stock will be
issued. Fractional shares of Rouse Properties common stock to which
GGP stockholders of record would otherwise be entitled will be
aggregated and, after the distribution, sold in the public market
by the distribution agent. The aggregate net cash proceeds will be
distributed ratably to those holders of record who would otherwise
have received fractional shares of Rouse Properties common
stock.
GGP intends to report the distribution of Rouse Properties
common stock (including cash in lieu of fractional shares) as a
taxable dividend for U.S. federal income tax purposes and,
therefore, the distribution of Rouse Properties common stock is
expected to satisfy a portion of GGP's 2011 and 2012 REIT taxable
income distribution requirements.
Following the spin-off, GGP's common stock will continue to
trade on the NYSE under the symbol GGP. Rouse Properties
intends to have its common stock listed on the NYSE under the
symbol "RSE". An information statement concerning the details
regarding the distribution of Rouse Properties common stock and its
business and management following the spin-off will be mailed to
GGP stockholders prior to the distribution date.
GGP shares will continue to trade "regular way" on the NYSE
under the symbol "GGP" through and after the January 12, 2012 Distribution Date. Any
holders of shares of GGP common stock who sell GGP common stock
"regular way" on or before January 12,
2012, will also sell their right to receive shares of Rouse
Properties common stock. In addition, it is anticipated that GGP
common stock will trade ex-distribution (without the right to
receive shares of Rouse Properties common stock) on or about
December 28, 2011, and continue
through the Distribution Date under the symbol "GGP WI". Investors
are encouraged to consult with their financial advisors regarding
the specific implications of buying or selling GGP common stock on
or before the Distribution Date.
A "when-issued" public trading market for Rouse Properties
common stock is expected to begin on or about December 28, 2011 on the NYSE under the symbol
"RSE WI" and will continue through the Distribution Date. GGP also
anticipates "regular way" trading of Rouse Properties common stock
under the symbol "RSE" will begin on Friday,
January 13, 2012, the first trading day following the
Distribution Date. Before the spin-off, GGP and Rouse Properties
will enter into a separation agreement and various other agreements
related to the spin-off.
The distribution of Rouse Properties common stock is subject to
the satisfaction or waiver of certain conditions, including, but
not limited to, the Form 10 being declared effective by the SEC,
Rouse Properties' common stock being accepted for listing on the
NYSE, the senior secured credit facility and subordinated revolving
credit facility being in full force and effect and funds being
available there under on the Distribution Date, and the other
conditions described in the Information Statement included in the
Form 10. GGP and Rouse Properties fully expect all conditions to
the spin-off will be satisfied on or before the Distribution Date.
However, in order to ensure that GGP satisfies its remaining REIT
taxable income distribution requirements for 2011, in the event the
conditions to the spin-off are not satisfied on or before the
Distribution Date, GGP will not distribute the shares of Rouse
Properties common stock on January 12,
2012, but will instead pay a special cash dividend on
Tuesday, January 17, 2012, to GGP's
stockholders of record as of the close of business of the NYSE on
Friday, December 30, 2011.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of federal securities laws, including the timing of and
benefits resulting from the separation of GGP and Rouse Properties,
and similar statements concerning anticipated future events and
expectations that are not historical facts. GGP cautions that these
statements are not guarantees of future performance and are subject
to numerous risks and uncertainties, including changes in market
conditions, unanticipated developments that prevent, delay, alter
the terms of, or otherwise negatively affect the spin-off, and
other risk factors that Rouse Properties identifies in its Form 10
or that GGP identifies in its most recent quarterly report on Form
10-Q. Any of these factors could cause actual results to differ
materially from the expectations expressed or implied in this press
release. GGP undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise.
FINANCIAL INFORMATION
This press release contains certain financial information about
Rouse Properties, including core net operating income which is a
non-GAAP financial measure. For additional information, including a
reconciliation of core net operating income to its most directly
comparable GAAP measure, see the Form 10.
ABOUT GGP
GGP is the second largest shopping center owner in the United States. GGP has ownership and
management interests in 167 regional and super regional shopping
malls in 42 states comprising approximately 169 million square
feet. A publicly traded real estate investment trust, GGP is listed
on the New York Stock Exchange under the symbol GGP.
ABOUT ROUSE PROPERTIES
The Rouse Properties portfolio will consist of 30 regional malls
in 19 states comprising approximately 21 million square feet.
Information about Rouse Properties can be found at www.ggp.com.
CONTACT:
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Kevin
Berry
|
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(312)
960-5529
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SOURCE General Growth Properties