Canadian landlord to acquire rest of U.S. mall owner
Brookfield Property offers US$23 a share for GGP
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.
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Jeffrey Miles Blidner, Richard B Clark, Steven James Douglas, Brett Mathew Fox
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