David Simon is unhappy. The Chairman and CEO of the Simon Property Group thinks the board of General Growth Properties is “inappropriately speculating with creditors' money ,” by not immediately accepting their $9.00 a share bid for the company. In a letter to GGP’s Chairman yesterday, Simon said “the current state of the retail industry and your company’s past history of risky financial choices, your lack of urgency should deeply concern creditors and shareholders.”
This got ugly fast and the rhetoric is becoming increasingly hostile. Simon made the initial offer to GGP’s board on February 8th and went public with the offer on Tuesday when GGP didn’t jump right on it.
“We have not received a substantive response to this offer from GGP or its advisors, nor any indication that you are prepared to enter into serious discussions so as to make our offer available to your shareholders and creditors. Accordingly, we are today making our offer public.”
In response GGP said in essence, thanks, we’ll get back to you.
“We and our board of directors have given considerable thought to your indication of interest and have concluded based on discussions with other interested parties that it is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the Company’s stakeholders.”
Of course some folks, such as GGP’s largest shareholder, think the Simon bid is a lowball offer and that the value of the company is much higher. Today the stock is trading at $12.72 a share.
The CEO of GGP has so far remained pretty cool in this exchange. In a letter to David Simon today, Adam Metz reiterated that GGP is working “to maximize value for the company and its stakeholders and we are engaging in a process that is intended to accomplish that result in an expeditious manner. Understandably, your objectives are not aligned with ours. We hope you will, nonetheless, participate in our process.”
As I said before, this is far from over.