Brookfield Property Partners Strikes Deal to Acquire GGP


Brookfield (BN) Property Partners is set to become the 100-percent owner of GGP, according to a joint news release issued today by the companies, after agreeing to a deal to pick up the remaining 66 percent of the real estate investment trust and mall owner it does not own.

Brookfield, which is the largest real estate arm of parent company Brookfield Asset Management, upped the cash consideration of its unsuccessful November 2017 offer for GGP to $23.50 per share, from $23 per share previously. That results in a $1.85 billion increase in Brookfield’s aggregate cash offering for the mall REIT, to $9.25 billion from $7.4 billion. (The $23.50 per share price is a premium for GGP stock, which closed at $21.21 a share today.)

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“Since receiving Brookfield’s initial proposal in November, [GGP’s] special committee has conducted extensive due diligence, specifically evaluating the optimal consideration structure for GGP’s shareholders,” Daniel Hurwitz, the lead director and chairman of the GGP special committee tasked with evaluating Brookfield’s bid to acquire the company, said in prepared remarks.

Hurwitz added: “After careful consideration, assisted by our independent advisers, the special committee determined that Brookfield’s improved proposal, which includes an increase in the cash portion of the consideration and the ability to receive shares in a newly listed REIT entity, provides GGP shareholders with certainty of value, as well as upside potential through ownership in a globally diversified real estate company.”

Upon approval of the acquisition by GGP shareholders, the combined Brookfield and GGP companies will have $90 billion in total assets and net operating income of more than $4 billion, according to the release. Under the terms of the deal, GGP shareholders can choose to receive $23.50 per share in cash, one Brookfield share or one unit of a new “BPY U.S. REIT.”

Brookfield, which already owned 34 percent of GGP, played a major role in helping the Chicago-based mall operator emerge out of bankruptcy in 2010.

“This is a compelling transaction that enables GGP shareholders to receive premium value for their shares and gives them the ability to participate in the long-term upside of their investment,” Brian Kingston, the CEO of Brookfield, said in a prepared statement. “We are pleased to have reached an agreement and are excited about combining Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors with GGP’s portfolio of irreplaceable retail assets.”

GGP hasn’t been Brookfield’s only acquisition target as of late.

Brookfield was reportedly in talks to acquire Forest City Realty Trust in January, but last week Forest City announced that it would re-organize its board rather than go through with a sale.

Additional reporting provided by Rebecca Baird-Remba.