Commercial Real Estate, Distressed Property, Retail

General Growth rejects Simon’s $10B offer

General Growth Properties Inc., owner of Honolulu’s Ala Moana Center, has rejected a $10 billion offer to sell to rival Simon Property Group.

But the nation’s second-largest mall owner did not reject outright Simon’s overtures and indicated it would consider being acquired as part of its efforts to emerge from Chapter 11 bankruptcy protection. Indianapolis-based Simon is the nation’s largest mall owner.

General Growth CEO Adam Metz, in a letter to rival Simon CEO David Simon, said the company remains committed to restructuring its debt but will not allow Simon to derail that process.

Metz said Simon’s offer “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.”

Chicago-based General Growth made the letter public in a press release issued Tuesday evening in response to Simon’s decision to publicize its acquisition offer. General Growth filed for bankruptcy protection in April 2009.

Simon, which owns the Waikele Premium Outlets on Oahu, said Tuesday it has offered to acquire General Growth for $10 billion, including $9 billion in cash. The offer would give General Growth creditors $7 billion in consideration.

Shareholders would get more than $9 a share, including $6 a share in cash.

General Growth owns or manages more than 200 regional shopping malls in 43 states, including Ala Moana Center, Ward Centre, Ward Entertainment Center and Ward Gateway Village in Honolulu and Prince Kuhio Plaza in Hilo. The company also manages Windward Mall on Oahu; King’s Shops at Waikoloa Beach Resort and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui.

Source: PBN