In the space of just more than a week, GGP's troubles have takenit from industry pariah to a prize to be fought over.Indianapolis-based Simon Property Group's massive $10billion takeover offer, tempting to stockholders with promisesof easy bailout cash, was rejected by the local bankrupt mall REIT.There was talk that Blackstone might join with Simon for financingassistance, but Tuesday rumors surfaced of apossible separate offer by Toronto-based Brookfield AssetManagement.

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Though some may question how a company, struggling to pay itsdebts, can turn down $10 billion, merger expert Ryan Thomas saysthe resistance by GGP's board comes from a well thought-outposition, in which they know the true negotiating process of nevertaking your first offer. "GGP wants control of this bidding," saysThomas, a partner with Bass Berry & Sims PLC. "Though Simon'soffer seems the most logical, GGP probably knows that they are notthe only game in town, and the board thinks they have enoughleverage to wait and see all options."

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The Simon offer was for $9 per General Growth share, a total of"$6 per share in cash and all of GGP's ownership interests in the[Master Planned Community] assets" according to Simon's offerletter. However, GGP itself and other retail REIT experts havevalued the company higher, ranging from $11 to more than $40 pershare. Brookfield, which has not publicly acknowledged a potentialbid, is allegedly considering a 30% stake in GGP. Officials fromBrookfield and GGP could not be reached, and a representative fromSimon said he could not comment.

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Thomas says Simon's bid was more of a test of the waters to seewhat GGP would accept, and GGP's response does not shut out Simonfrom consideration. "They left the door open for Simon," Thomassays, referring to a GGP statement that Simon is welcome tocontinue in the "process." Now, with the Brookfield rumor outthere, the ball is in Simon's court, he says. "It's up to Simon tosweeten the pot, to up the ante. Now we see who blinks," Thomassays.

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He says that a recentlawsuit by a GGP shareholder upset about the company notaccepting the Simon offer is also par for the course, but notreally a consideration in the game playing out. "A lawsuit ispretty typical in this situation, but a board doesn't have anobligation to agree to sell themselves if they think an offer isundervalued," Thomas says.

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