Blackstone May Invest in General Growth

NEW YORK (Reuters) – Private equity firm Blackstone Group LP (BX.N) is considering investing $500 million alongside a group that has offered to help General Growth Properties Inc (GGP.N) exit bankruptcy protection, a source familiar with the matter said on Friday.

Brookfield Asset Management Inc (BAMa.TO), William Ackman’s Pershing Square Capital Management and Fairholme Capital Management have offered to make a $6.55 billion equity investment and $2 billion capital backstop to help the second-largest U.S. mall owner emerge from Chapter 11.

Blackstone would contribute to that investment under the deal being discussed, the source said, declining to be named because the talks are not public.

Blackstone had earlier teamed up with Simon Property Group Inc (SPG.N) in its unsuccessful bid to buy General Growth.

Simon, which pursued its smaller rival for months, withdrew its bid earlier this month when a judge allowed General Growth to make the Brookfield-led offer the starting bid in a bankruptcy auction.

The judge also approved giving the Brookfield-led group warrants worth several hundred million dollars as compensation for their investment commitment, which Simon did not want.

General Growth could not be reached immediately for comment. Blackstone declined to comment.

General Growth’s shares were up 0.6 percent at $12.82, while Blackstone was off 0.1 percent at $10.99, during late trading on the New York Stock Exchange. Brookfield was up 0.2 percent at C$24.75 on the Toronto Stock Exchange. (Reporting by Megan Davies and Paritosh Bansal, editing by Gerald E. McCormick) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)