Blackstone Group LP, the world’s largest private-equity firm, may join Simon Property Group Inc.’s bid to buy bankrupt General Growth Properties Inc., according to two people with knowledge of the discussions.

Blackstone is in preliminary talks with Indianapolis-based Simon, the biggest U.S. mall owner, said the people, who declined to be identified because the negotiations are private. Simon, which made a $10 billion takeover offer for General Growth public Feb. 16, would lead any resulting partnership, one of the people said.

A collaboration with Blackstone would give Simon more “firepower” and may allow it to raise its offer after General Growth rebuffed it as too low, said Ben Yang, an analyst with Keefe, Bruyette & Woods in San Francisco. General Growth would consider a new bid if it was high enough, rather than moving forward with a plan to solicit more proposals, according to a person with knowledge of the Chicago-based company’s position.

“Simon made it clear in their offer on Tuesday that their offer contemplated bringing in one or more joint-venture partners,” said Alexander Goldfarb, an analyst with Sandler O’Neill & Partners LP in New York. “Taking on something as big as General Growth, it helps minimize the financial risk by bringing in co-investment partners.”

General Growth filed for Chapter 11 protection in the biggest real estate bankruptcy in U.S. history in April after amassing $27 billion in debt to buy shopping malls. The company may try to raise $1 billion to $2 billion from public markets to fund its exit from bankruptcy, according to the person familiar with General Growth’s plans, who asked not to be named because the negotiations are private. It would consider seeking more money if there were sufficient investor demand, the person said.

Blackstone, based in New York, managed more than $23 billion in real estate assets as of Sept. 30. Its property funds had more than $12 billion of equity to invest as of June 30, according to the firm’s Web site.

“Blackstone has a lot of capital to put to work and large investors feel there may be more opportunity at the entity-level as opposed to competing for individual properties,” Dan Fasulo, managing director of research firm Real Capital Analytics Inc. in New York, said.

Les Morris, a spokesman for Indianapolis-based Simon; David Keating, a General Growth spokesman; and Christine Anderson, a Blackstone spokeswoman; all declined to comment on Blackstone’s potential partnership with Simon.

Blackstone is forming a joint venture with Glimcher Realty Trust for malls in Portland, Oregon, and Tampa, Florida and made a $6.3 million security deposit, Columbus, Ohio-based Glimcher said in its fourth-quarter earnings report this week.

The Glimcher venture means the buyout firm is “obviously looking to enter the space” for malls, said Yang.

Other bids may emerge for General Growth, which has more than 200 regional shopping malls in 43 states, according to Jim Sullivan, a retail analyst at Newport Beach, Calif.-based research firm Green Street Advisors. The shares have rallied 35 percent this week to above Simon’s offer, signaling investors expect a higher price.

Brookfield Asset Management Inc. owns almost $1 billion in General Growth debt, according to two people with knowledge of the company’s holdings. Brookfield may emerge as a possible bidder, according to Sullivan. Denis Couture, Brookfield’s senior vice president of corporate and international affairs, declined in an interview this week to say whether the Toronto- based real estate investor will make a takeover offer.

Westfield Group, a Sydney-based owner with stakes in 55 U.S. malls with about 63 million square feet, is “watching the situation” at General Growth, Managing Director Steven M. Lowy said this week in a conference call.

“This is a unique portfolio,” said Real Capital’s Fasulo. ‘There will be other interested parties.”