According to Bloomberg News, investor James Young filed a class action lawsuit against GGP on Friday in Chicago's Cook County Chancery Court. Young claims that GGP Chairman John Bucksbaum and other board members breached a fiduciary duty in turning down the offer.
Indianapolis mall giant Simon publicly made the offer to GGP that would include $9 billion in cash and would keep the existing secured debt in place. However, GGP officials said in a response that the offer was not enough to dissuade it from its attempt to emerge from bankruptcy, and would like to entertain other offers.
On Feb. 17, Simon then sent a letter saying it could act quickly to close the deal, and that GGP should consider the needs of its creditors and shareholders. David Simon, CEO and chairman, did not hide his frustration with what he said has been a long and fruitless negotiation process.
"We have tried for many months to explore a transaction with you that would give creditors and shareholders an attractive and expeditious exit from your bankruptcy process and have been repeatedly put off. Time and again, serious engagement with us has been pushed off into some indefinite future when you might start to begin to commence a 'process'," Simon said in his letter.
However, GGP CEO Adam Metz responded with a terse public statement on Feb. 18 saying his company needs to look at all options. "Understandably, your objectives are not aligned with ours," said Metz in part of his response.
Officials from Simon and GGP could not be reached for comment on this story. The attorney listed on the lawsuit told GlobeSt.com that she could not comment on the complaint.
The offer is not open-ended, but is subject to confirmatory due diligence which can take up to 30 days. The offer must be approved by the shareholders, as well as the bankruptcy courts. Simon recently reported a $485M FFO for the fourth quarter of 2009 and has been amassing funds for purchasing this year.
Simon, the largest mall owner in the country, with 321 assets that include the largest outlet mall portfolio in the country, would absorb General Growth's 200 malls and large outdoor centers.
You can read the entire Bloomberg story here.
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