NEW YORK CITY — Brookfield Asset Management (NYSE: BAM) has submitted a non-binding proposal to acquire all outstanding shares of common stock of Brookfield Property Partners (NASDAQ: BPY), which would effectively take its commercial real estate division private.
Brookfield Property Partners has about 357.6 million outstanding shares. Brookfield Asset Management’s bid to acquire those shares from public investors at $16.50 per share gives the deal a total price tag of $5.9 billion.
The $16.50 per share price represents premiums of 14.9 percent and 14 percent, respectively, over the closing price of the BPY units on the Toronto Stock Exchange and NASDAQ on Dec. 31. This price also reflects premiums of 8.9 percent and 29.4 percent, respectively, over the 30-day and 180-day volume-weighted average prices of the BPY shares on NASDAQ.
Brookfield Asset Management’s proposal does not include the purchase of shares of preferred stock or other securities of Brookfield Property Partners or its subsidiaries. Under the terms of the deal, for each share they hold, BPY shareholders can elect to receive $16.50 in cash, 0.4 BAM Class A shares or 0.66 of BPY preferred shares.
Should the proposed transaction go forward, Brookfield intends to file a transaction statement and other related documents with the Securities and Exchange Commission (SEC) in connection with the transaction. The transaction documents also will be filed with the Canadian securities regulatory authorities.
Brookfield Property Partners has formed a special committee of independent directors to review the offer, and said investors don’t need to take any action at this time, according to Bloomberg. Any transaction would be subject to a vote requiring approval from the majority of minority holders.
Brookfield Property Partners has approximately $575 billion in assets under management.
“The privatization will allow us to have greater flexibility in operating the portfolio and realizing the intrinsic value of BPY’s high-quality assets,” says Nick Goodman, CFO of Brookfield Asset Management.
The stock price of Brookfield Asset Management opened at $41.04 per share on Monday, Jan. 4, up from $38.39 per share a year ago. The stock price of Brookfield Property Partners opened at $16.94 per share today, down from $18.21 per share a year ago.
— Taylor Williams