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Simon, Brookfield Strike Deal To Buy J.C. Penney Co. Out Of Bankruptcy

Mall owners Simon Property Group and Brookfield Property Group have reached an agreement with JCPenney Co. to buy the struggling retailer and its operating assets out of Chapter 11 bankruptcy for $1.75B. 

A former JCPenney store at a Bristol, Virginia, mall that closed in 2017.

The proposed buyout deal includes cash payment and new term loan debt, Plano, Texas-based JCPenney confirmed in a public statement.

As part of the acquisition plan, the parties could create a separate real estate investment trust and property holding company that will house 161 of JCPenney's real estate assets along with its distribution centers. The investment trust will be owned by an ad hoc group of first lien lenders, Penney's said. 

Analysts have long projected the two mall owners were waiting in the wings to save the retailer, given Penney's role as an anchor tenant at many Simon and Brookfield properties. 

JCPenney filed for Chapter 11 bankruptcy earlier this year after spending years battling a changing retail sector and struggling under the weight of $4B in debt. 

Despite the company's difficulties in today's e-commerce-driven market, analysts remained positive about the Penney's brand surviving bankruptcy reorganization.

Since its May bankruptcy filing, numerous reports have speculated that Penney's and its real estate remain prominent acquisition targets, with Amazon reportedly interested in the brand's real estate at one point. 

Penney's aims to finalize the buyout process and emerge from bankruptcy prior to the 2020 holiday shopping season.