GGP: I'M NOT YOUR VALENTINE
|Simon Properties, an Indianapolis-based retail owner, announced yesterday plans to buy General Growth Properties for more than $10 billion, including $9 billion in cash. But Chicago-based GGP, which has struggled since filing for bankruptcy in 2008, might just leave Simon at the altar.|
GGP's Adam Metz responded to Simon in a letter indicating that the company was looking to explore other options, including “ a stand-alone restructuring funded with institutional equity capital as well as potential business combinations.” Some of GGP's more popular properties include Water Tower Place, just north of the Hancock Center on Michigan Ave, and OakBrook Center. Simon offered GGP shareholders $9 per share ($6 cash and $3 in a distribution of GGP's ownership interest in Simon). Existing secured debt of GGP's portfolio of assets would remain in place. The GGP letter indicated that it still wished to start exploring options by March and invited Simon to participate.
Simon chairman David Simon says that the offer would allow certainty to the protracted process of GGP's reorganization. Michael Stamer, counsel for the Official Committee of General Growth's Unsecured Creditors, says Simon's offer for full payment to those creditors would be a great result. Quantum Real Estate Services'Chad Firsel, who works in retail investment in the Chicago area, says the purchase would alleviate stress for tenants looking to lease in former GGP properties because Simon will pay off any debt GGP has run up. Simon currently owns several malls throughout the eastern half of the US.