Brookfield Seeks to Restructure Offer for GGP -- WSJ

By Dana MattioliFeaturesDow Jones Newswires

This article is being republished as part of our daily reproduction of articles that also appeared in the U.S. print edition of The Wall Street Journal (December 23, 2017).

Brookfield Property Partners LP is working to restructure its offer for the shares of mall owner GGP Inc. that it doesn't already own, according to people familiar with the matter.

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Last month, the private-equity firm made a public offer worth $14.8 billion, or $23-per-share, for the 66% of GGP it doesn't already own. The offer was half in cash and half in equity.

GGP has pushed back on the offer, wary of accepting Brookfield stock in its current form, some of the people said.

Now, the real-estate investor is considering two options to change its proposal.

In one, Brookfield would create a new form of stock to use as consideration, the people said. It would be equity in an entity created by hiving off some of Brookfield's properties and combining them with GGP. It isn't clear which Brookfield properties those would be. GGP shareholders also would get cash. It isn't clear whether that would be the same amount as in the current offer or not.

In the other option, Brookfield would bump the cash component and continue to offer its stock, some of the people said. Brookfield is talking to other investors about providing additional cash to support this option.

It isn't clear what either new bid would be worth.

It is possible Brookfield will decide against either option or that it could restructure the deal in a different way, some of the people said.

Shares of Chicago-based GGP, formerly known as General Growth Properties, were trading just above $23 Friday afternoon in a sign that investors are betting that a sweeter offer could come.

The company owns around 125 high-end retail centers around the U.S., including Tysons Galleria near Washington, D.C., Glendale Galleria outside Los Angeles and Chicago's Water Tower Place. The company emerged from bankruptcy in 2010 with backing from Brookfield and other investors.

Brookfield Property owns or operates office properties, retail centers and multifamily housing units among about $68 billion in total assets. The firm is part of Brookfield Asset Management, a Canadian alternative-asset manager with more than $265 billion under management, including about $150 billion in real estate. Its portfolio includes London's Canary Wharf and Brookfield Place in lower Manhattan.

If a deal is reached, it would come at a tough time for mall operators, which are struggling to adapt to the migration of shoppers to the web.

GGP operates so-called A malls, premium properties that house movie theaters, restaurants, ice-skating rinks and other entertainment venues alongside traditional retailers. While its properties have held up better than lower-end malls, it has made some changes to adapt to shifting consumer behavior.

Like other mall operators, GGP has taken back spaces from dozens of department stores that no longer draw the heavy foot traffic they once did, replacing them with gyms, high-end grocery stores or fast-fashion retailers.

Part of the rationale of the proposed deal would be to help the mall operator add features to its properties, such as office space, entertainment and apartment blocks.

Write to Dana Mattioli at

(END) Dow Jones Newswires

December 25, 2017 02:47 ET (07:47 GMT)