Real estate investment firm Brookfield Property Partners LP on Monday made an unsolicited bid to buy the 66 percent stake in mall owner GGP Inc it does not own for US$14.8 billion in cash and stock.
The US$23 cash-and-stock offer for each GGP share represents a premium of 3.6 percent to GGP’s Friday close. But it is at a 21 premium to GGP’s close on November 6, a day before Bloomberg reported that Brookfield was in preliminary talks with GGP.
GGP’s shares were trading above the offer price at US$23.85, suggesting some investors were expecting a higher bid. Brookfield’s shares were down 5 percent at US$22.44 in morning trade.
With about 127 properties, mostly in the United States, GGP’s tenants include carmaker Tesla, jeweler Tiffany & Co and retailer Macy’s Inc.
Brookfield Property, spun off from Toronto-based Brookfield Asset Management, holds about 34 percent in GGP through several entities.
GGP said its board had formed a special committee to review and consider the proposal.
The deal is expected to create a company with an ownership interest in almost US$100 billion real estate assets globally and annual net operating income of about US$5 billion, Brookfield said. GGP shareholders will own about 30 percent of the combined company.
Citigroup Global Markets Inc is serving as financial adviser and Sullivan & Cromwell LLP is serving as legal counsel to GGP.
Update: Chicago-based GGP was formerly known as General Growth Properties Inc.
(Reporting by Sanjana Shivdas; Editing by Sriraj Kalluvila)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of GGP Inc