Tuesday, February 16, 2010

Simons Bids $10 Billion for GGP

Simon Property Group ended months of speculation today when they announced a $10 billion offer for General Growth Properties. According to this story in Crains Chicago Business, the Simon offer “includes about $9 billion in cash and would pay off all General Growth’s unsecured creditors…”

“Simon’s offer would provide a full cash recovery of par value plus accrued interest and dividends to unsecured creditors, “the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement,” the release says. “

This is far from over. I fully expect the GGP board to say that this offer is too low. The Simon bid values GGP shares at around $9.00. GGP’s largest shareholder, Pershing Capital, believes the company is worth more than $12.00 a share. I would also expect that we will hear of a rival bid from Brookfield in the next few days.

7 comments:

Emily said...

Verrry interesting. The construction company I work for does some work for GGP, so I wonder how this will effect their management. They're nice people in my experience, if a bit bureaucratic, so I wish them the best regardless.

And random question, from a new reader to your blog (Thank you so much, as an EC resident I love it!) - any update on the Wegmans situation? I'm so darn sick of driving up to Hunt Valley...

Sarah said...

@Emily: check out Howchow's post about Wegmans: http://howchow.blogspot.com/2010/02/educated-guess-columbia-wegmans-opens.html

D. White said...

Wow....$10 billion for GGP! And only five years after GGP paid $13 billion for Maryland's Rouse Company.

There's a great novel based on the GGP/Rouse deal: Pink Slips and Parting Gifts:

http://pinkslipsandpartinggifts.blogspot.com/

Anonymous said...

GGP Response

http://www.marketwatch.com/story/general-growth-properties-responds-to-simon-property-group-and-reaffirms-bankruptcy-emergence-process-2010-02-16?reflink=MW_news_stmp

Anonymous said...

Can I post as anon?

Anonymous said...

This is so cool! Posting as anon! It's so many less keystrokes than posting as myself!

SERIOUSLY. $10B seems low. I'm thinking that GGB will want to go 13 to 14 billion, or, just grab some capital somewhere else to make it through they're b-ruptcy.

EVEN MORE SERIOUSLY: Howard County/Columbia/Columbia Mall is a jewel in the crown of GGP...but it's only one of some 170 or more properties they have. Simons has 300 properties, about half of which are equal in quality to Columbia. In this context, we're talking HoCo as small potatoes.

How can the county take advantage of this? Bob O.

Emily said...

@Sarah: Thank you so much for that! (And a new blog to follow!)