Under the Brookfield investment, GGP's existing shareholders will receive one share of new GGP common stock with an initial value of $10 per share, plus one share of General Growth Opportunities with an initial value of $5 per share, for a total consideration of $15 per share. The plan includes Brookfield investing $2.6 billion, GGP raising an additional $2.5 billion in cash through a combination of the issuance of new corporate level indebtedness and about $1 billion in asset sales, and the company raising an additional $3.3 billion in equity capital. The plan is subject to approval by the bankruptcy court and better offers pursuant to a bidding process.
"The Brookfield-sponsored recapitalization – coupled with the more than $13 billion of restructured debt, our compelling scale as the second-largest regional mall owner, our fortress assets and a business plan that focuses on further deleveraging the balance sheet and building liquidity – provides a strong financial foundation for the future," said Adam Metz, GGP CEO, in a statement about the deal. John Bucksbaum is chairman of the company.
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 offer letter. However, GGP itself and other retail REIT experts have valued the company higher, ranging from $11 to more than $40 per share. Simon, GGP and Brookfield representatives could not be reached for comment.
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