Brookfield Proposes to Acquire Rouse Properties in All-Cash Offer of $17 Per Share

by Amy Works

NEW YORK CITY — Brookfield Asset Management Inc. has made an unsolicited offer to buy the majority stake of mall owner Rouse Properties Inc. that it doesn’t already own for $17 in cash per share, or approximately $657 million. Brookfield currently owns about 33 percent of Rouse’s outstanding shares.

The proposed price represents a premium of 26 percent to the closing price of Rouse shares on Jan. 15, and a 19 percent premium to the 30-day volume-weighted average trading price of Rouse shares. The proposal was presented to the Rouse Board of Directors on Jan. 16.

Rouse Properties (NYSE: RSE), a New York City-based publicly traded real estate investment trust, is a regional mall owner. The company’s portfolio includes 35 malls and retail centers in 21 states encompassing approximately 24.1 million square feet. Rouse was created in 2012 when General Growth Properties Inc. spun off a portfolio of 30 malls.

According to the Wall Street Journal, Toronto-based Brookfield Asset Management (NYSE:BAM)(TSX:BAM.A)(EURONEXT:BAMA) acquired a 33 percent stake in the Rouse portfolio by leading a $30 billion restructuring of General Growth Properties to help it emerge from bankruptcy in 2010.

Brookfield Asset Management describes itself as a global alternative asset manager with approximately $225 billion of assets under management. Brookfield oversees $123 billion in commercial and residential real estate, spread across North America, parts of Europe, Asia and South America, according to the Wall Street Journal.

Rouse has established a special committee delegated with the power to evaluate, accept, reject or negotiate the proposal, or alternatively explore and solicit other proposals

On Jan. 18, the special committee selected Sidley Austin LLP as its independent legal counsel and BofA Merrill Lynch as its independent financial advisor to assist the special committee in reviewing and evaluating the Brookfield proposal and any alternatives.

Rouse’s stock price closed on Wednesday, Jan. 20, at $17.31 per share, down from $19.25 per share a year ago.

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