Bidders For General Growth Properties (GGP) Look To Sovereign Wealth Funds For Support

According to a report by the Financial Times, rival bidders for General Growth Properties, Inc. (NYSE: GGP) are looking to sovereign wealth funds (SWF) for financial support on the deal. General Growth Properties is the bankrupt owner of some of U.S’s biggest shopping malls.

The bidders for the bankrupt company are looking to SWFs in the Middle East and Asia for support, according to people familiar with the matter. The rival bidders for General Growth include Simon Property Group, Inc. (NYSE: SPG) and Brookfield Asset Management, Inc. (NYSE: BAM). The two companies are apparently in early stage talks with SWFs.

According to Guy Metcalfe, head of real estate investment banking at Morgan Stanley (NYSE: MS), several large SWFs are working with both the bidders on the deal. Metcalfe also said that newer SWFs are under-allocated to real estate.

The takeover battle for General Growth started earlier this year after Simon Property offered the bankrupt company $10 billion. The board of General Growth, however, rejected Simon’s offer and is planning a recapitalization with $6.5 billion in additional capital from Brookfield, Fairholme Capital Management, and Pershing Square, which is a hedge fund owned by Bill Ackman.

Simon is seeking financial support from SWFs such as Qatar Investment Authority. Meanwhile, Brookfield is looking at SWFs that have invested in its distressed real estate opportunity fund, which is $5.5 billion in size. The SWFs, which have invested in the fund, include Government Investment Corporation of Singapore, China Investment Corporation, Australian Fund for the Future, and Canadian Pension Plan Investment Board.