IBJNews

General Growth board sued for rejecting $10B Simon bid

Back to TopCommentsE-mailPrintBookmark and Share

Directors at Chicago-based General Growth Properties Inc. are being sued by a shareholder claiming they shouldn’t have rejected a $10 billion buyout offer from competitor Simon Property Group Inc.

Chairman John Bucksbaum and six other board members are accused of breaching their fiduciary duty to the bankrupt mall operator’s investors when they turned down Simon’s bid, according to a complaint filed Friday in state court in Chicago.

“This conduct is substantially unfair to GGP and the company’s public shareholders,” investor James Young said in his complaint brought on behalf of stockholders and for the benefit of the company.

Indianapolis-based Simon, the nation’s largest mall operator, offered to buy its largest rival out of bankruptcy for more than $10 billion in a bid made public Tuesday. Under that offer, shareholders would get about $9 a share, including $6 in cash.

General Growth said the price was too low and that it would invite other potential buyers to make bids.

David C. Keating, a company spokesman, said he hadn’t seen the lawsuit and couldn’t immediately comment on it.

Young seeks a court order barring the directors from entering into any contract that harms the company or makes it more difficult or costly for a would-be purchaser to acquire it.

Not surprisingly, Simon also has been critical of General Growth’s strategy. CEO David Simon called the company’s plan for discussing the proposed takeover “unreasonable” and asked the company to reconsider its negotiating agreement in a letter sent to General Growth Chief Executive Officer Adam Metz and distributed Friday in a news release.

Simon said General Growth’s draft of a non-disclosure agreement would prohibit the company from talking with potential partners and wouldn’t ensure Simon receives the same information made available to other bidders.

“By continuing to request the unreasonable restrictions set forth in your proposed non-disclosure agreement, you render your ‘process’ a charade from the start by seeking to exclude the most logical and capable acquirer,” David Simon said in the letter.

General Growth’s non-disclosure agreement “is designed to promote a level playing field and a competitive process to maximize value for all GGP stakeholders,” said Keating, the spokesman.

“Its terms are customary and reasonable,” Keating said. “We do not believe it is productive to attempt to negotiate the terms of an NDA with Simon through press releases.”

Michael Stamer, attorney for the General Growth’s official committee of unsecured creditors, said in Friday in a statement that the mall owner should begin talks with Simon immediately.

“The terms of the non-disclosure agreement provided to Simon by General Growth are excessively restrictive and not in the best interest of the unsecured creditors and other stakeholders,” Stamer said in the statement.

ADVERTISEMENT

  • Sic Deborah Simon on them!
    She needs a job, so let her track down those General Growth people and leave poor Bren alone!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
thisissue1-092914.jpg 092914

Subscribe to IBJ
ADVERTISEMENT