Simon (SPG) Preparing A New Offer For General Growth (GGP)

Bloomberg has quoted an unidentified source to report that Simon Property Group, Inc. (NYSE: SPG) is in the process of preparing a new offer for General Growth Properties, Inc. (NYSE: GGP).

Last month, Simon, the biggest US mall owner, had offered to purchase bankrupt General Growth for more than $10 billion. However, General Growth termed the offer as too low and turned it down. Instead it had planned to split into two to escape bankruptcy, arranging the financing from a group led by Brookfield Asset Management, Inc. (NYSE: BAM).

General Growth had filed the largest real estate bankruptcy in the US after accumulating $27 billion of debt to fund acquisitions. It has been reported now that Simon’s lawyers have sent a letter to General Growth on March 15 stating therein that it would make the new offer sometime this week, or early next week. It has also mentioned that it will address all antitrust and financing concerns over this deal. This move was initiated as a response to a letter that Simon received from General Growth mentioning their apprehensions on Simon’s ability to fund the acquisition as also the applicability of antitrust laws. Simon has now mentioned that it would take care of all antitrust issues and that JP Morgan Chase & Co (NYSE: JPM) will be providing $6 billion in loan for this deal.

The original bid that Simon had made for acquiring General Growth would have given its equity shareholders about $9 each. In comparison, the Brookfield plan values General Growth at about $15 a share.