After initially rejecting a buyout offer from Brookfield Property Partners, General Growth Properties (GGP) has reached a deal for Brookfield to buy the two-thirds of GGP it doesn't already own for $9.25 billion in cash.
"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 announcing the merger of the shopping mall developers.
General Growth Properties previously owned Northgate Mall in Chattanooga, but GGP sold the Hixson shopping center to CBL Properties in 2011.
With the new merger deal announced this week, those who own GGP shares can either receive $23.50 for each of their shares in cash, one Brookfield share or shares in a new company. Brookfield wants to create a new real estate investment trust with the ticker symbol "BPR."
One of the largest shopping center owners and operators in the United States, Chicago-based GGP turned down the $23-per-share cash and stock offer from Brookfield in November. GGP's special committee of its board of directors called that initial offer last year "inadequate."
But shopping mall owners and operators have seen a downturn in sales and foot traffic with the rise of eCommerce and stock values for most mall developers have dropped in the past year. Shares in the Chattanooga-based CBL Properties, for instance, closed Tuesday at $4.52 per share — up nearly 8 percent from its Feb. 5 low but still less than half of its value a year ago.
Office and retail properties owner and operator Brookfield noted in November that the acquisition of GGP would create growth for its company, as it looks to help GGP's shopping centers transition into the modern days of retail.
Contact Dave Flessner at email@example.com or at 757-6340.