General Growth said to consider buyout offer
General Growth Properties, which operates several major malls in Las Vegas, is reportedly considering a new buyout offer from rival mall operator Simon Property Group worth $33 billion. The deal could have local implications because both companies have local holdings.
The Wall Street Journal said Monday that the buyout offer, delivered Sunday, amounted to $6 billion, $18.25 per share. A source told the Journal the deal will also have Simon Property assume $7 billion in unsecured debt and $20 billion of mortgages for which General Growth's malls are pledged as collateral.
The Journal said Simon Property's offer reflects General Growth's plans to split into two companies: one owning most of its 204 U.S. malls and a smaller company holding riskier assets, such as its residential-development division.
Buyout firm Blackstone Group LP joined Simon's bid, sources told the Journal, promising to contribute an undisclosed sum to own some debt-laden General Growth malls in partnership with Simon.
Meanwhile, The Associated Press said Monday that a group led by Brookfield Asset Management offered $6.5 billion offer to help finance General Growth's exit from Chapter 11 bankruptcy. The AP said General Growth prefers this offer by Brookfield, Pershing Square Capital Management and Fairholme Funds over Simon Property's proposal.
The New York Times said General Growth will on Wednesday ask the federal bankruptcy judge overseeing its case to grant Brookfield's plan stalking-horse or preliminary bid status, which would let it set the baseline for competing bids.
In Las Vegas, General Growth owns the Boulevard, Meadows and Fashion Show malls, the Grand Canal Shoppes at The Venetian and the Shoppes at Palazzo. Simon Property owns the Forum Shops at Caesars, the Las Vegas Premium Outlets and the Las Vegas Outlet Center.
Simon Property shares rose $3.76, or 4.22 percent, to close at $92.78 on the New York Stock Exchange. General Growth shares rose $1.08, or 6.88 percent, to $16.78, also on the NYSE.
