Partnerships / Acquisitions

GGP Malls Passes On Brookfield’s $14.8 Billion Offer

Real estate investment trust GGP has rejected a buyout offer from global real estate investment firm Brookfield Property Partners, according to news from CNBC on Monday (Dec. 11). The $14.8 billion offer was to purchase the 66 percent of GGP shares that Brookfield Property, GGP’s largest stakeholder, does not currently own.

One of the largest shopping center owners and operators in the U.S., Chicago-based GGP turned down the $23-per-share cash and stock offer on Nov. 11. The buyout and subsequent combination of GGP and Brookfield Property would have resulted in a mammoth publicly traded property company — potentially one of the world’s largest.

GGP’s special committee of its board of directors called the initial offer “inadequate.”

Negotiations between the two real estate companies are expected to continue, and anonymous sources have claimed Brookfield Property is currently considering new offer terms. Neither company has offered additional comment on the potential future buyout.

Shopping mall owners and operators have seen a downturn in sales and foot traffic with the rise of eCommerce. Office and retail properties owner and operator Brookfield Property noted in November that the acquisition deal would create growth for its company, as it looks to help GGP’s shopping centers transition into the modern days of retail.

Brookfield Property Partners finished out trading on Friday at $21.61 per share, with a total valuation of $15.2 billion. GGP finished trading on Friday at $23.43 per share, representing a market capitalization of $22.2 billion. Its underperformances in the stock market this year could be attributed to its connections to struggling brick-and-mortar retailers, like Sears.

A merger between Brookfield Properties and GGP would mean a mega real estate company with nearly $100 billion in global assets and approximately $5 billion in net operating income.

Other malls are also seeing mergers and acquisitions. Brookfield Property formerly attempted to buy out U.S. mall owner Rouse Properties, an agreement that eventually went through with a raised offering price. Similarly, GGP rival Macerich is currently being pursued by Third Point Management, an activist hedge fund.

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