- Brookfield Property Partners said it has reached an agreement to purchase the remaining stake in retail landlord GGP for $23.50 a share
- CEO Sandeep Mathrani in line to get $189 million in sale of GGP. Sandeep Mathrani for seven years has led the Chicago shopping mall owner whose properties include Water Tower place. (He was hired away from the retail division at Vornado Realty Trust, where he served as president for eight years.)
Mall owner GGP to be acquired by Brookfield Property Partners (BPY) for $9.25 bln (either $23.50/share in cash or either one BPY unit or one share of new BPY US REIT security)
- GGP shareholders will be entitled to elect to receive, for each GGP common share, either $23.50 in cash or either one BPY unit or one BPR share. Elections are subject to proration which will be based on aggregate consideration in the transaction of (1) a fixed amount of $9.25 bln in cash and (2) ~254 mln BPY units / BPR shares, which represents aggregate consideration of ~61% cash and ~39% of BPY or BPR equity. The consideration in the transaction will be structured as (1) a dividend by GGP paid in cash and equity and (2) merger consideration paid in cash.
- In conjunction with and in support of the proposed transaction, Brookfield Asset Management (BAM) has stated its intention to convert $500 mln currently held in BPY Class C Junior Preferred Shares into BPY units at a price of $23.50 per unit, resulting in BAM's acquisition of ~21.3 mln BPY units.
- In addition, to allow for synergies and cost savings between BPY and GGP to be effectuated following closing of the transaction, BAM, which provides management services to BPY and will also provide services to BPR following closing, has agreed to waive, for one year, the management fees payable by BPR and the incremental management fees BPY would otherwise be required to pay in respect of the units issued in exchange for GGP shares.