CHICAGO – General Growth Properties Inc., the bankrupt owner of Providence Place mall, told competitor Simon Property Group Inc. that it needed to raise its $10 billion offer for the company.
On Tuesday, Indianapolis-based Simon made public its proposal to purchase General Growth and bring it out of bankruptcy. The merger would create a monstrous mall operator, with the new company operating more than 585 malls or shopping plazas across the country.
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But on Wednesday, General Growth CEO Adam Metz rejected the offer in a public letter to Simon CEO David Simon.
“We and our board of directors have given considerable thought to your indication of interest and have concluded based on discussions with other interested parties that it is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the company’s stakeholders,” Metz said in the letter.
Simon offered about $9 a share. The stock closed Tuesday at $12.02. It had been trading at about $9 a share before Simon’s offer.
But Metz did not completely rule out a deal and offered to work with Simon to “enable you to better understand the company, get to a higher valuation, and provide a fully documented offer.”
General Growth entered bankruptcy in April after going on a buying spree. The company has insisted that the process has not affected customers at 2 million-square-foot Providence Place and its other shopping centers around the country.
General Growth also owns the 1.04 million-square-foot Silver City Galleria in Taunton and Faneuil Hall Marketplace in Boston, while managing the 700,000-square-foot Swansea Mall, which is owned by New York-based Carlyle Development Group Inc.
Simon’s properties include 1.02 million-square-foot Emerald Square, as well as the nearby 615,713-square-foot Wrentham Village Premium Outlets off Interstate 495.
