Rouse Agrees to Increased Brookfield Buyout

Rouse Properties Inc. said Thursday that it agreed to be taken private by an affiliate of Canada's Brookfield Asset Management Inc. in a deal valuing the U.S. mall operator at $1.06 billion.

Brookfield has been in pursuit of Rouse, having made public a lower offer to buy the company in January.

Brookfield, whose Brookfield Property Partners LP already holds a 33% stake in Rouse, will buy Rouse's remaining stock for $18.25 a share in cash. The Canadian asset manager says the deal's value including debt is $2.8 billion.

The purchase price represents a 35% premium over Rouse's closing price Jan. 15, the last trading day before Brookfield's first offer to buy Rouse became public. The agreed-upon offer is $1.25 a share higher than Brookfield's original $17-a-share offer.

Shares of Rouse rose 1.6% premarket to $18.04.

"Brookfield's increased proposal provides shareholders with compelling value as well as a high degree of execution certainty," David Kruth, chairman of the Rouse board's special committee, said Thursday.

Brookfield oversees $123 billion in commercial and residential real estate, spread across North America, parts of Europe, Asia and South America. Its bid for Rouse underscores the Toronto-based company's focus on using its financial muscle and scale to acquire out-of-favor real-estate assets.

The deal comes at a time when the stocks of Rouse and many other U.S. shopping-mall rivals are under pressure amid concerns their earnings are at risk due to overbuilding and the rise of e-commerce.

Rouse said Thursday that it won't host an earnings conference call for its fourth quarter and full-year 2015 results or provide financial guidance. It also won't declare its regular quarterly dividend during the pending period of the transaction.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 25, 2016 09:25 ET (14:25 GMT)

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