Brookfield Bids $14.8B for GGP

The proposed deal would net shareholders $23 per share and BPY units. The official proposal was submitted to the board of directors on Nov. 11.

By Keith Loria

Shobi Khan, President and CEO of GGP
Shobi Khan, President & COO of GGP

Brookfield Property Partners L.P. (BPY), has made a $14.8 billion proposal to purchase all the outstanding shares of common stock of GGP Inc., other than the 34 percent of shares BPY and its affiliates already own.

“Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors combined with GGP’s high-quality retail asset base will allow us to maximize the value of these irreplaceable assets,” Brian Kingston, Brookfield Property Group’s CEO, said in a prepared release. “We are excited about the opportunity to leverage our expertise to grow, transform or reposition GGP’s shopping centers, creating long-term value in a way that would not otherwise be possible.”

The acquisition of the 66 percent of remaining shares will be purchased for $23 per share or 0.9656 of a limited partnership unit of BPY. The proposal represents a premium of 21 percent to the unaffected closing share price of GGP’s common stock of $19.01 as of Nov. 6.

When finalized, the deal will create one of the largest listed property companies in the world, with an ownership interest in almost $100 billion of premier real estate assets globally and annual net operating income of approximately $5 billion.

“This transaction will provide GGP shareholders the option to immediately realize value for their shares at a 21 percent premium in cash and the opportunity to continue to participate in the growth of a leading, globally diversified real estate company that will be able to grow faster and create more value than either could on a stand-alone basis,” Kingston said.

Pending approval

BPY presented its proposal to GGP’s board of directors on Nov. 11, and is subject to the negotiation and execution of definitive transaction documents and customary approvals, including, approval of a majority of the company’s stockholders not affiliated with BPY.

Brookfield Property Partners is one of the world’s largest commercial real estate companies, with approximately $68 billion in total assets. The combined company will be one of the highest quality and most diverse real estate portfolios globally, with a strong balance sheet and financial profile.

This summer, Brookfield Property Partners saw Business Insider sign a 10-year lease for 88,000 square feet at 1 Liberty Plaza, a 2.3 million-square-foot Class A office building, the company owns.

GGP had recently promoted Shobi Khan to the titles of president & COO.

Image courtesy of GGP

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