Cana­dian land­lord to ac­quire rest of U.S. mall owner

Brook­field Prop­erty of­fers US$23 a share for GGP

Stockwatch Daily - - FRONT PAGE - Mr. Brian Kingston re­ports

BROOK­FIELD PROP­ERTY Part­ners LP has made a non-bind­ing pro­posal to ac­quire all the out­stand­ing shares of com­mon stock of GGP Inc., other than those shares cur­rently held by Brook­field Prop­erty and its af­fil­i­ates (rep­re­sent­ing ap­prox­i­mately 34 per cent of the out­stand­ing shares). Each com­mon share of GGP will be ac­quired for con­sid­er­a­tion of $23 (all fig­ures U.S.). Each GGP share­holder can elect to re­ceive con­sid­er­a­tion per GGP com­mon share of ei­ther $23 in cash or 0.9656 of a lim­ited part­ner­ship unit of Brook­field Prop­erty Part­ners, sub­ject in each case to prora-

tion based on a max­i­mum cash con­sid­er­a­tion of ap­prox­i­mately $7.4-bil­lion (50 per cent of the ag­gre­gate of­fer) and a max­i­mum of ap­prox­i­mately 309 mil­lion Brook­field Prop­erty Part­ners units val­ued at ap­prox­i­mately $7.4-bil­lion (50 per cent of the ag­gre­gate of­fer). The pro­posal rep­re­sents a premium of 21 per cent to the un­af­fected clos­ing share price of the com­pany’s com­mon stock of $19.01 on Nov. 6, 2017.

The trans­ac­tion will cre­ate, in Brook­field Prop­erty Part­ners, one of the largest listed prop­erty com­pa­nies in the world, with an own­er­ship in­ter­est in al­most $100-bil­lion of pre­mier real es­tate as­sets glob­ally and an­nual net op­er­at­ing in­come of ap­prox­i­mately $5-bil­lion.

Brian Kingston, chief ex­ec­u­tive of­fi­cer of Brook­field Prop­erty Group, said: “Brook­field’s ac­cess to large-scale cap­i­tal and deep op­er­at­ing ex­per­tise across mul­ti­ple real es­tate sec­tors com­bined with GGP’s high-qual­ity re­tail as­set base will al­low us to max­i­mize the value of these ir­re­place­able as­sets. We are ex­cited about the op­por­tu­nity to lever­age our ex­per­tise to grow, trans­form or re­po­si­tion GGP’s shop­ping cen­tres, cre­at­ing long-term value in a way that would not oth­er­wise be pos­si­ble.”

He con­tin­ued, “This trans­ac­tion will pro­vide GGP share­hold­ers the op­tion to im­me­di­ately re­al­ize value for their shares at a 21-per-cent premium in cash and the op­por­tu­nity to con­tinue to par­tic­i­pate in the growth of a lead­ing, glob­ally di­ver­si­fied real es­tate com­pany that will be able to grow faster and cre­ate more value than ei­ther could on a stand-alone ba­sis.”

The com­bined com­pany will be owned ap­prox­i­mately 30 per cent by ex­ist­ing GGP share­hold­ers. It will own one of the high­est-qual­ity and most di­verse real es­tate port­fo­lios glob­ally, with a strong bal­ance sheet and fi­nan­cial pro­file. The trans­ac­tion is ex­pected to be im­me­di­ately ac­cre­tive to Brook­field Prop­erty Part­ners’ FFO (funds from op­er­a­tions) per unit and will pro­vide for an en­hanced div­i­dend to GGP’s share­hold­ers who elect to re­ceive Brook­field Prop­erty Part­ners units.

Brook­field Prop­erty Part­ners pre­sented its pro­posal to the board of di­rec­tors of GGP on Nov. 11, 2017. The trans­ac­tion is sub­ject to the ne­go­ti­a­tion and ex­e­cu­tion of de­fin­i­tive trans­ac­tion doc­u­ments and cus­tom­ary ap­provals, in­clud­ing, ap­proval of a ma­jor­ity of the com­pany’s stock­hold­ers not af­fil­i­ated with Brook­field Prop­erty Part­ners.

There is no as­sur­ance that the GGP board will ap­prove a trans­ac­tion with BPY or that a trans­ac­tion will be con­sum­mated.

Brook­field Prop­erty Part­ners LP

Brook­field Prop­erty Part­ners is one of the world’s largest com­mer­cial real es­tate com­pa­nies, with ap­prox­i­mately $68-bil­lion in to­tal as­sets. It is lead­ing own­ers, op­er­a­tors and in­vestors in com­mer­cial real es­tate, with a di­ver­si­fied port­fo­lio of pre­mier of­fice and re­tail as­sets, as well as in­ter­ests in mul­ti­fam­ily, triple net lease, in­dus­trial, hos­pi­tal­ity, self-stor­age, stu­dent hous­ing, and man­u­fac­tured hous­ing as­sets.

We seek Safe Har­bor.

Jef­frey Miles Blid­ner, Richard B Clark, Steven James Dou­glas, Brett Mathew Fox

(BPY) Shares: 254,888,613

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