PROVIDENCE – Mall operator Simon Property Group has withdrawn its $6.5 billion takeover bid for bankrupt General Growth Properties, the parent of Providence Place.
Indianapolis-based Simon said in a statement Friday that it would withdraw its offer after a federal bankruptcy judge approved a reorganization plan promoted by GGP. That plan calls for Brookfield Asset Management Inc. to invest $6.5 billion in Chicago-based GGP. GGP will also spin off its “noncore” assets, which do not include Providence Place, into a new company.
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“GGP’s decision to move forward with the latest Brookfield-sponsored change of control recapitalization, without giving due consideration to SPG’s proposals, is a truly unfortunate result for all GGP stakeholders,” David Simon, chairman and chief executive officer of Simon Property, said in a statement.
The CEO said the Brookfield plan valued GGP at $15 a share, while the Simon plan would have offered $20 a share when accounting for warrants issued under the Brookfield proposal.
A merger between Simon and GGP would have created a behemoth mall operator with the combined new company operating more than 585 shopping centers across the country. Simon had been trying publicly since February to find a way to acquire its rival.
“For many months, SPG has tried to work collaboratively and productively with GGP to bring our proposals to fruition,” Simon said. “SPG has been highly flexible, making numerous changes to its proposals in response to requests from GGP, its stakeholders and its advisors. GGP’s decision to proceed with a transaction that transfers hundreds of millions of dollars in value to the Brookfield consortium has caused us to conclude that we cannot reach a mutually beneficial transaction with GGP.”
