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.