Blockbuster mall deal: Brookfield to take over GGP

An agreement has been struck that will create one of the world’s largest retail real estate companies.

Brookfield Property Partners LP has finally reached an agreement to buy the remaining shares of General Growth Properties that it doesn’t already own for $9.25 billion in cash plus stock. The total value of the deal was put at about $15.3 billion. Brookfield currently owns about one-third of GGP, which is the second largest mall owner in the country, after Simon.

The agreement comes after GGP rejected a $14.8 billion cash-and-stock buyout offer (or $7.4 billion in cash) from Brookfield last November. After an independent board called the bid inadequate, the two sides went back into negotiations.

The acquisition will enhance Brookfield Property’s negotiating power with retailers. GGP owns about 127 “A” level mall properties. With an ownership interest in approximately $90 billion in total assets and annual net operating income of more than $4 billion, the combined company will be one of the world’s largest commercial real estate enterprises.

“We are pleased to have reached an agreement and are excited about combining Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors with GGP’s portfolio of irreplaceable retail assets,” Brookfield Property Partners CEO Brian Kingston said in a statement.

With the new proposal, GGP shareholders can choose to receive either $23.50 a share in cash, one Brookfield unit or shares of a real estate investment trust that Brookfield plans to create.

The transaction between Brookfield and GGP is expected to close early in the third quarter of this year.

From: Chain Store Age

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