INDIANAPOLIS — Indianapolis-based Simon Property Group has made a $10 billion offer to acquire General Growth Properties, promising $9 billion in cash. The deal would net General Growth shareholders more than $9 per sharein cash and ownership interests. Creditors would receive complete cash recovery of all outstanding debts against General Growth, a consideration totaling $7 billion.
According to a letter from Simon CEO David Simon to General Growth's Board of Directors, Simon's offer has been on the table for more than a week and has been made public because the company has received no response. “Simon's offer provides the best possible outcome for all General Growth stakeholders,” Simon said in a statement. “Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process.”
The transaction would be financed through cash on hand, equity co-investments and Simon's credit facility. Officials are confident the required due diligence can be completed in 30 days. Lazard Ltd., J.P. Morgan and Morgan Stanley are advising Simon in financing matters. Simon's legal advisor is Wachtell, Lipton, Rosen & Katz.
The Official Committee of General Growth's Unsecured Creditors approves the deal and has encouraged General Growth to consider the offer.
“Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result,” said Michael Stamer, council for the unsecured creditors, in a statement. “We fully support and encourage prompt engagement by the company with Simon.”
— Jon Ross