Brookfield Bids for Rest of GGP -- WSJ
November 13 2017 - 3:02AM
Dow Jones News
By Dana Mattioli
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 13, 2017).
Brookfield Property Partners LP has made a $14.8 billion offer
to acquire the shares of mall owner GGP Inc. that it doesn't
already own, according to people familiar with the matter.
Brookfield has offered to pay $23 a share for the remaining 66%
of GGP, half in cash and half in equity, some of the people said.
GGP investors could choose either cash or 0.9656 of a
limited-partnership unit of Brookfield Property for each share,
subject to proration that keeps the consideration of cash and units
from each exceeding $7.4 billion.
On Friday, GGP shares closed at $22.20, having surged on reports
earlier in the week of a potential deal between the companies.
Brookfield currently owns about 34% of Chicago-based GGP,
formerly known as General Growth Properties, which has a market
value of about $21 billion.
There is no guarantee that GGP will agree to the offer, which
Brookfield submitted to the company's board Saturday, according to
a person familiar with the matter. Any deal would also be subject
to approval from a majority of non-Brookfield-affiliated GGP
shareholders.
GGP owns around 125 high-end retail centers around the U.S.,
including Tysons Galleria near Washington, D.C., Glendale Galleria
outside Los Angeles and Chicago's Water Tower Place. The company
emerged from bankruptcy in 2010 with backing from Brookfield and
other investors.
Brookfield Property owns or operates office properties, retail
centers, multifamily housing units among about $68 billion in total
assets. The firm is part of Brookfield Asset Management, an
alternative-asset manager with more than $265 billion under
management, including about $150 billion in real estate. Its
portfolio includes London's Canary Wharf and Brookfield Place in
lower Manhattan.
If a deal is reached, it would come at a tough time for mall
operators, which are struggling to adapt to the migration of
shoppers to the web. Before GGP shares rallied earlier in the week,
they were down by about 25% so far this year.
GGP operates so-called A malls, premium properties that house
movie theaters, restaurants, ice-skating rinks and other
entertainment venues alongside traditional retailers. While its
properties have held up better than lower-end malls, it has made
some changes to adapt to shifting consumer behavior.
Like other mall operators, GGP has taken back spaces from dozens
of department stores that no longer draw the heavy foot traffic
they once did, replacing them with gyms, high-end grocery stores or
fast-fashion retailers.
Part of the rationale of the proposed deal would be to help the
mall operator add features to its properties, such as office space,
entertainment and apartment blocks, one of the people said.
Write to Dana Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
November 13, 2017 02:47 ET (07:47 GMT)
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