Mergers & Acquisitions and Commercial Real Estate and Public Companies and Simon Property Group and Deals and Real Estate & Retail

Simon offers $10 billion for General Growth

February 16, 2010
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Simon Property Group Inc. on Tuesday morning announced a $10 billion offer to acquire Chicago-based General Growth Properties Inc. out of bankruptcy.

The acquisition would be the largest ever for Simon, already the nation’s largest mall owner. General Growth has 200 properties and $3.4 billion in revenue.

Simon says its bid includes $7 billion to creditors and about $3 billion to General Growth shareholders. The company also said its offer might be amended so shareholders could receive Simon stock instead of cash.

The offer amounts to $9 per share for shareholders of General Growth, which filed for Chapter 11 bankruptcy protection last year. Parts of its restructuring plan were approved in December.

“Simon’s offer provides the best possible outcome for all General Growth stakeholders,” David Simon, Simon’s chairman and chief executive officer, said in a statement Tuesday. “Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth’s protracted reorganization process.”

Simon said it submitted its offer on Feb. 8 but made the offer public Tuesday, claiming it had not yet received a "substantive response" from executives.

General Growth filed the biggest real-estate bankruptcy in U.S. history in April after amassing $27 billion in debt during an acquisition spree. At the time of the filing, the company said it had about $11.8 billion in debt that had matured or was due by the end of 2012.

A spokesman for General Growth had no immediate comment on the deal.

Simon shares rose 23 cents in premarket trading Tuesday to $72.23.

Click here to see the latest update on this story.

Bloomberg News contributed to this report.

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