Westfield Group enters General Growth fray, source says

February 25, 2010

Westfield Group, a Sydney-based owner with stakes in 55 U.S. malls, signed a non-disclosure agreement to receive information from bankrupt General Growth Properties Inc., a person familiar with the pact said.

A similar agreement was signed by Simon Property Group Inc., the largest U.S. shopping mall owner, which last week offered to buy Chicago-based General Growth, its biggest rival, for more than $10 billion, said the person, who asked not to be identified because the pacts are private.

General Growth yesterday announced plans to split itself into two companies as part of an effort to exit Chapter 11 bankruptcy. The proposal, which must be approved by a bankruptcy court judge, includes a $2.63 billion investment from Brookfield Asset Management Inc. Indianapolis-based Simon dismissed the plan as “a complex piece of financial engineering that is so highly conditional as to be illusory.”

Westfield spokeswoman Julia Clarke declined to comment Thursday. Westfield has been “watching the situation” at General Growth, Managing Director Steven M. Lowy said last week in a conference call with analysts and investors.

Westfield has $8 billion of borrowing capacity on hand, and is thus far acting along, said the Wall Street Journal reporter earlier, citing people familiar with the matter.

Additional offers may emerge, General Growth President Thomas H. Nolan Jr. said in an interview on Wednesday.

“We feel very good about the Brookfield proposal,” Nolan said. “Given the bankruptcy bidding rules, there can be other bidders. They can come forward at any point in the process.”

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