General Growth has expressed that it may be more amenable to this type of deal, as opposed to rival Simon Property Group's $10-billion offer. Staying an individual company is a large draw for General Growth's executives, but the process may be more complicated. GGP is planning a stock sale to raise capital in order to rise out of bankruptcy. In this scenario, Brookfield would be the largest buyer and, subsequently, take over the majority share of the retail REIT.
The stock sale is estimated to raise roughly $7 billion, almost all of which would go to pay unsecured debt and many of the creditors would be compensated in a mix of cash and stock. If GGP were to take Simon's offer, the creditors could be paid off in full, in cash.
Currently, a shareholder is filing a lawsuit against GGP accusing chairman John Bucksbaum and other board members of breaching their fiduciary duty by turning down Simon's $10-billion offer. Meanwhile, published reports say that Simon is in discussions with Blackstone for a joint bid for GGP.
To read the entire WSJ article, click here.
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