Posted on 02/16/2010 10:49:42 AM PST by 2ndDivisionVet
Simon Property Group Inc. has submitted a $10 billion bid to buy the bankrupt General Growth Properties Inc.
Indianapolis-based Simon (NYSE: SPG) owns nearly 400 retail properties nationwide, including Ingram Park Mall and Rolling Oaks Mall in San Antonio.
Chicago-based General Growth Properties (Pink Sheets: GGWPQ) owns North Star Mall and is an investor in The Shops at La Cantera in San Antonio.
Under the terms of the offer, about $7 billion of the total bid would go toward General Growth’s creditors. Shareholders of General Growth would receive the balance of the funds — which equates to more than $9 per share. This is below General Growth’s closing price on Monday at $9.40 per share, however.
Shareholders and creditors also would have the option of receiving shares of common stock in Simon as payment.
Simon’s offer is subject to due diligence and requires a definitive agreement between the two companies as well as approvals from the U.S. Bankruptcy Court and creditors.
Simon plans to finance this transaction using available cash on hand and funds from strategic institutional investors. The balance would come from Simon’s existing credit facilities. Simon anticipates the acquisition of General Growth Properties will be accretive to earnings in the first year of closing.
Simon officials say they already have the support of General Growth’s unsecured creditors and contend that the buy-out would help lift the company out of bankruptcy.
“Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result,” according to a statement released by Michael Stamer, counsel for the Official Committee of General Growth’s Unsecured Creditors. “We fully support and encourage prompt engagement by the company with Simon.”
Simon Chairman and CEO David Simon submitted a letter to General Growth’s CEO and financial advisers on Feb. 8 outlining the offer. Simon sent a follow up letter to General Growth’s board of directors on Tuesday indicating that the company’s management has not yet responded to the offer.
Here in Minneapolis-St Paul, Simon Properties owns two malls, Southdale and Maplewood Mall.
Southdale has the title of the United States’ first indoor shopping mall. It used to be the premier place to go in the Twin Cities but after the Mall of American was built, it has lost a fair amount of business.
Still, it’s a decent place to shop.
How many investors are dumping NBC stock over the dismal Winter Olympics?
Simon owns three malls here in Pittsburgh. One is rapidly dying. Don’t think General Growth has anything within 300 miles. If any local effect they might close the dying mall to conserve cash flow.
Interesting what you say about Southdale. The Northgate Mall in North Seattle is said to be the first regional shopping center called a mall and also indoors (well, two rows facing each other and a COVERED pedestrian walkway between them.)
Not that it’s particularly important, I just found that interesting.
In Massachusetts, the two most notable properties owned by GGP are the Faneuil Hall Marketplace tourist trap in downtown Boston, and the snooty but dead Natick Collection west of Boston.
While Friedman make a good buck, without his wife's help can he afford his (from Wikipedia) The July 2006 issue of Washingtonian reported that they own "a palatial 11,400-square-foot house, currently valued at $9.3 million, on a 7½-acre parcel just blocks from I-495 and Bethesda Country Club."
Also, isn't it interesting that Friedman is another liberal telling us we have to cut back severely on our miserly energy use while he lives like a king.
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