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i have sold 2500 shares of my ggp holdings which were in my taxable account in order to replenish my cash reserves. i also sold 229 shares of hhc for the same reason. currently i am still holding 10k shares of ggp in my taxable account and 10k shares in my ira's. also am holding 1000 shares of hhc in my taxable account and just shy of 1000 shares of hhc in my ira's. depending on what happens with the tax package before the senate now i my sell an additional 1k shares of ggp in my taxable account before the endo of the year. with the remainder i am satisfied to let them ride. intention is to keep them in my ira's for at least the next 5-10 years and to gradually sell off portions of each in my taxable account over the next 5-10 years.
i have to believe that hhc may have, and in fact has had, better stock appreciation than ggp but also like my ggp because of the anticipated dividends it will pay out.
at this point it just kind of comes down to where you are in life and what dice you are willing to roll or keep rolling with ggp and hhc. i'm in retirement and ggp/hhc has taken me from a rice and beans lifestile to a meat and potatos one. i'm thankful for that but also anticipate with continued good health that i could live for 20-30 more years and will need to stay in the market to keep up with anticipated inflation and i do think that ggp and hhc are good inflation hedges.
I heard that once GGP is listed in the REITS that it will attract quite a bit more buyers as they have to include this stock in their portfolio - do you know when that may happen?
no, i do not know. however, i would think that since ggp is now out of bk there is nothing preventing any reit index from owning ggp.
i sold 229 shares of the hhc in my taxable account which gets me down to an even 1000 shares. on the ggp, i wanted to sell 2500 shares just to replenish my cash account and had hoped the new stock issue would spike up the price a bit. now i'm not sure what is going on. esp since you see the gm ipo target price raised. just really wonder what was going on with the thinking when ggp announced its stock offering was going to be priced at 14.75 when the stock closed at 15.40. that certainly seems like a questionable move.
well, simon was down over 3.5% today and the market was also down so maybe not too much to make of this move other than mkt jitters. ireland is not helping things and while i would like to see the idiots who put together those bogus mba's get taken to the cleaners, it would probably cause another mkt crash which would really freak me now. if i get those 2500 shares sold then i really don't care in the short term and i'll be happy to hold 20k shares of ggp and 2k shares of hhc while things work themselves out.
yes, i received my hhc shares a couple of days ago and i am able to trade them. however, the ggp shares are not yet reflected and tdameritrade has told me that the will not be properly reflected in my accounts until next tuesday. i called bny mellon, which is the transfer agent, and inquired why the delay. they are getting back to me but looks like i will not be able to sell any of my shares until next week.
when issued trading commences today!!
CHICAGO--(BUSINESS WIRE)-- General Growth Properties, Inc. (“GGP”) announced that NYSE “when issued” trading is commencing today in both “new” GGP common stock and the common stock of the spin-off company called The Howard Hughes Corporation. NYSE “when issued” trading will be conducted under the symbols “GGP WI” and “HHC WI,” respectively. “When issued” trading in both stocks will continue leading up to and including the day GGP emerges from bankruptcy. GGP’s existing common stock is traded on the NYSE under the symbol “GGP” and will continue to trade regular way leading up to and including the day GGP emerges from bankruptcy. “New” GGP and THHC will commence regular way trading the day following the day GGP emerges from bankruptcy.
Additional information regarding the spin-off and “when issued” trading can be found at http://www.ggp.com/about-ggp/restructuring-overview.
details on new stock issuance:
Press Release Source: General Growth Properties, Inc. On Thursday October 21, 2010, 7:29 pm
CHICAGO--(BUSINESS WIRE)-- General Growth Properties, Inc. (“GGP”) today announced November 1, 2010, is the record date for the distribution of shares of the two separate publicly traded corporations that will exist following GGP’s emergence from bankruptcy. Pursuant to GGP’s plan of reorganization, each holder of a share of “old” GGP common stock as of the record date will receive 0.0983 of a share of common stock of the spin-off company, The Howard Hughes Corporation. Following the distribution of the shares of The Howard Hughes Corporation, existing shares of “old” GGP will be converted into and represent the right to receive one “new” GGP share. No fractional shares of new GGP or The Howard Hughes Corporation will be issued. The record date was determined in accordance with the confirmation order entered today by the bankruptcy court. The distribution date will be the day GGP emerges from bankruptcy, which is expected to be on or around November 8, 2010.
New GGP’s common stock has been approved for listing under the symbol GGP, subject to official notice of issuance, on the New York Stock Exchange (“NYSE”). The Howard Hughes Corporation has filed an application to list its common stock on the NYSE under the symbol HHC. GGP anticipates that NYSE “when issued” trading in the common stock of both companies will commence prior to the distribution date. An update on commencement of “when issued” trading will be provided when available.
Given the nature of this transaction, holders of “old” GGP shares who sell their shares leading up to and including on the emergence/distribution date will be giving up their entitlement to both new GGP and The Howard Hughes Corporation shares. Holders are therefore encouraged to consult their financial advisors before trading their existing shares of GGP.
i can not believe the sec makes any requirement about pricing based on pre-bk pricing. that makes no sense. what if ggp were forced to have disposed of a significant number of properties during the bk process. in that instance there would be no way their post-bk pricing would/could reflect pricing prior to bk. also, at what point prior to bk would be the sec be thinking would apply. just don't buy that trader's comment.
the following is a reply i made on another forum. i believe it accurately addresses what i think may happen with the pricing. i'm not going to cut and paste out the irrelevant parts but it isn't a long read.
by way of example, lets assume you currently hold 10,000 shares of ggp. once the por is approved (assumed to be tomorrow at the scheduled hearing) and ggp emerges from bk (assumed to be monday, nov. 8) your old ggp shares will be composed of the following:
1 share of new ggp for each share of old ggp that you owned. i.e. you would receive 10,000 shares in the newly emerged general growth properties.
.09873 shares of hhc (howard hughes corporation) for each share of old ggp that you owned. i.e. you would receive 983 shares of hhc stock.
the 10,000 shares of old ggp which you owned would be cancelled in exchange for the above.
it is my belief that the $10.50 value on the new ggp and the $5.00 value on the hhc stock was a floor value placed on each of these stocks when brookfield, fairholme, and pershing agreed to provide their multi-billion dollar funding package in exchange for stock in the new companies. that does not necessarily mean that the new stock will be issued at those prices.
general growth negotiated with these entities (and texas teachers retirement fund) that IF the post emergence stock offering was placed at values greater than the $10.50 and $5.00 amounts that general growth could claw back up to about $2.5 billion in stock that pershing, fairholme, brookfield and texas teachers had received, thereby reducing the percentage ownership these entities would have in the new ggp and hhc companies.
now to your question about value. it is again my belief that when the underwriters do the ipo of the new ggp and hhc stock (which i would assume would be on monday the 8th) that those shares could be offered at an amount greater than the floor price. if that is the case there will be upside beyond the presumed $15.50 floor. if the stock is offered at the floor price and there is no upward movement upon issuance, then today's price of around $17/share would "lose" about $1.50/share.
i've thought all along that the stock would issue above the floor price and that might be why you are seeing the stock trading above that level. this has been one of the tightest lipped bankruptcy processes i have seen. there has been little to no leakage of inside information regarding the process ahead of formal announcements. therefore i believe that any trade above the floor is being done on the speculation that the offering will be done at a price greater than the floor value.
one other point regarding the hhc stock. it will be priced to reflect an approximately 10 for 1 reverse split (the .0983 per share calculation). therefore, the $5.00 floor needs to be re-priced to $50.86 share but remember you are getting less shares.
the time to play this stock in the last few months was during the runup over the simon takeout offers. the price climbed above $18/share. after the simon bid was rejected, the stock fell into the $12's. some good money was made by those who felt (correctly) that ggp's management would reject simon's bid as a low-ball offer for the quality of assets held by ggp. if you had sold your 10k shares in the $17.50 to $18.00 range anticipating the rejection of simon's bid and bought back in someplace in the high $12's there was a good $50k to be had.
i don't think the speculation now is worth the bet. if you were to have sold today expecting to get back in at $15 for a quick $2/share uptick and the new stock ends up being offered above the floor price you would find yourself chasing it.
i've been in since march '09 and got my shares at an average of $.039/share. am currently sitting on about a 4400% gain and am just happy to let this emerge and see how it plays out.
40% of my holdings are in ira's and the remaining 60% is in a taxable account. if the stocks spike on emergence i might trade my ira shares so as not to incur capital gains. even though there is uncertainity about who the new ceo will be and what management team will be put into place upon the selection of the new ceo i believe there will be a lot of interest in this stock (mainly the new ggp as opposed to the hhc stock). the new ggp will be a reit and any reit indexes will be obligated to pick up shares of ggp to properly reflect ggp's inclusion in the reit universe of stocks. hhc will not be a reit and will probably be 3-5 years from reaching its stride so the interest might be limited to those who truly are looking for a long-term play with a lot of potential upside.
if ggp is not a $30 stock by sometime during 2013 i will be very surprised but then again, the last 2 years have provided more than enough surprises to last most people a lifefime.
ackman to head spinco:
to be called "howard hughes co."
http://www.crainsnewyork.com/article/20100910/REAL_ESTATE/100919987
yes, still holding on to 22.5k shares. a little less than half in ira's and the remainder in taxable account.
8k, 2nd amend por, disclosure stmt:
attached is today's sec link to the above documents. looks like things moving along toward emergence.
http://www.sec.gov/Archives/edgar/data/895648/000110465910044863/0001104659-10-044863-index.htm
have seen no specific date but ggp has reiterated that it is on track to emerge in october so that is when i would be looking for this all to shake out.
also looks like a dividend will be paid out in a cash/stock option
emergence details:
http://www.sec.gov/Archives/edgar/data/895648/000110465910041506/a10-15131_1ex99d2.htm
looks like for each share of ggp which you currently own (if more than 10 shares) you will receive 1 share of new ggp and .0983 shares of spinco.
look at pages 20, 49, and 58-62 for some of the details.
detail: ggp supplemental financial data
http://www.ggp.com/content/Docs/1Q2010_financials.pdf
GENERAL GROWTH PPTYS INC (GGP) Dividends & Splits
Recent Splits
There are no splits available.
--------------------------------------------------------------------------------
5 Year Dividend History
Payable Amount/Share
01/28/2010 $0.19
— $0.00 — — 09/25/2009
— $0.00 — — 06/25/2009
— $0.00 — — 03/25/2009
— $0.00 — — 09/25/2008
07/31/2008 $0.50
04/30/2008 $0.50
01/31/2008 $0.50
10/31/2007 $0.50
07/31/2007 $0.45
04/30/2007 $0.45
01/31/2007 $0.45
10/31/2006 $0.45
07/31/2006 $0.41
04/28/2006 $0.41
01/31/2006 $0.41
10/31/2005 $0.41
07/29/2005 $0.36
04/29/2005 $0.36
01/31/2005 $0.36
amended financial info.
amended due to the stock filing in brzail.
http://www.sec.gov/Archives/edgar/data/895648/000095012310048100/c58182aexv99w1.htm
bloomberg reports on ggp decision:
General Growth Wins Court Approval of Brookfield-Led Bid
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By Tiffany Kary and Daniel Taub
May 8 (Bloomberg) -- General Growth Properties Inc., the second biggest U.S. mall owner, won bankruptcy court approval for an auction process that makes a group led by Brookfield Asset Management Inc. property the first bidder. General Growth fell 11 percent in New York trading.
U.S. Bankruptcy Judge Allan Gropper in Manhattan approved General Growth’s plan over one proposed by the country’s biggest mall owner, Simon Property Group Inc. It gives Brookfield, Fairholme Capital Management LLC and Pershing Square Capital Management LP warrants to buy stock in the reorganized company in exchange for financing. Testimony at yesterday’s hearing focused on whether the warrants might chill bidding.
“As I understand the process, it is intended to open rather than close, the bidding,” Gropper said during the hearing, adding that General Growth’s equity holders, creditors and board all backed the Brookfield bid.
General Growth, based in Chicago, said the bid is intended to serve as a so-called stalking horse for higher offers or help raise money from capital markets. Simon said the warrants would dilute General Growth’s value, prompting the Indianapolis-based company to withdraw from bidding. Simon made its last offer for General Growth last night.
‘Hastily Decided’
“We are disappointed that the GGP board hastily decided in less than 24 hours to accept substantially less value,” Simon Chief Executive Officer David Simon said in a statement. “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.”
General Growth dropped $1.77 to $14.07 yesterday in New York Stock Exchange composite trading. Simon rose 80 cents, or 0.9 percent, to $85.68.
“We think that the business is worth materially more than Simon thought it was,” said Glenn Tongue, managing partner of T2 Partners LLC, which owns more than 2 million General Growth shares. “We’re thrilled to have a mechanism through which we can own this company on a long-term basis, until it gravitates up to its intrinsic value.”
Lorraine McGowan, a partner in the New York office of Orrick, Herrington & Sutcliffe LLP, said before yesterday’s hearing that the “business judgment rule,” which says the bankruptcy court shouldn’t supplant the corporate governance of a company, would work in General Growth’s favor.
‘Carefully Vetted’
“The issues have been carefully vetted and negotiated by the board,” Gropper said. “This court cannot and will not substitute its judgment for that of the board.”
The Brookfield-backed proposal approved yesterday is worth $7 billion in equity. The group also agreed to loan the company as much as $1.5 billion if it can’t raise the funding elsewhere. General Growth lawyer Marcia Goldstein said the financing will allow the company to choose a final best offer and file its Chapter 11 reorganization plan by mid-July.
Brookfield’s plan “gives all shareholders the chance to participate in the tremendous upside of this company for a very, very long time, as opposed to being cashed out at the bottom of the market,” Cyrus Madon, senior managing partner at Brookfield, said in an interview yesterday. “We’re going to be working very hard to get through the rest of the bankruptcy process with the company, and then get to the task of creating value.”
Offer Raised
On May 6, Simon raised its competing offer to about $6.5 billion, which would value General Growth at $20 a share. Its original bid on Feb. 16 would have given General Growth stockholders $9 a share, including $6 in cash. Both that plan and the new one would have paid in full all of General Growth’s unsecured creditors, who hold about $7 billion in debt.
Ronen Bojmel, a managing director at General Growth’s financial adviser Miller Buckfire & Co., testified that the permanent warrants are worth about $688 million. They could vary in value from $200 million to $1.2 billion, depending on how the company is valued when it exits bankruptcy, he said.
“The numbers are extraordinary, but this is an extraordinary case,” Gropper said.
Under the revised Brookfield bid, Pershing Square will waive its share of interim warrants, and Toronto-based Brookfield will increase the strike price on its warrants to $10.75 from $10.50, Goldstein told Gropper yesterday.
Bruce Berkowitz, founder of Miami-based Fairholme, one of Brookfield’s two partners and General Growth’s largest creditor, said the warrants help balance the risk associated with a $15- per-share investment in General Growth. The company closed 93 cents below that price yesterday, meaning that Fairholme, without the warrants, currently is losing about $173 million on the investment, he said in an interview yesterday.
‘Far From Riskless’
“I promise you, these warrants are not free,” Berkowitz said. He added that he believes General Growth’s shares will rise, and expects his investment to be profitable. “I would not have offered the deal or done the deal if I didn’t think so. But it’s far from riskless.”
Pershing Square’s CEO William Ackman offered to forgo 17 million interim warrants in an effort to push through Brookfield’s plan, saying Simon’s bid posed antitrust risks because it would unite the nation’s two largest mall owners.
“General Growth is pleased, as this secures a $6.55 billion equity investment and a $2 billion backstop and has material improvements,” Goldstein told Gropper. She said General Growth’s board met twice since receiving Simon’s revised offer, and still found the Brookfield plan superior.
General Growth filed the largest real estate bankruptcy in U.S. history in April 2009 after amassing $27 billion in debt making acquisitions. Its properties include New York’s South Street Seaport, Boston’s Faneuil Hall and the Grand Canal Shoppes and Fashion Show in Las Vegas.
The case is In re General Growth Properties Inc., 09-11977, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Tiffany Kary in New York at tkary@bloomberg.net; Daniel Taub in Los Angeles at dtaub@bloomberg.net.
Last Updated: May 8, 2010 00:01 EDT
bloomberg just reported that the court approved ggp's plan utilizing bam/per/fair and NOT simon. simon has officially withdrawn its bid. hurrah!!!
reuters ggp update #3
UPDATE 3-General Growth backs Brookfield bid, Simon may walk
* Gives GGP flexibility in talks with Simon
* Pershing Square to forgo interim warrants
* GGP hopes move won't end dialogue with Simon
* Simon likely to walk away from bid -source
* GGP off 2.5 pct, Simon up 1.8 pct (Updates throughout with new sourcing, details, background, share price)
By Paritosh Bansal and Ilaina Jonas
NEW YORK, May 7 (Reuters) - General Growth Properties Inc (GGP.N) is set to ask a bankruptcy court on Friday to approve an investment led by Brookfield Asset Management Inc (BAMa.TO), after reducing a related warrants package by 14 percent.
The move is a setback for Simon Property Group Inc (SPG.N), which raised its bid late Thursday for General Growth, hoping its "best and final" offer would persuade the target to favor its deal. [ID:nN06101794]
General Growth President Thomas Nolan, who was at the bankruptcy court in Manhattan, said the board voted telephonically on the move early on Friday, confirming an exclusive Reuters report that General Growth was going to stick with Brookfield.
Nolan told Reuters the company notified Simon Chief Executive David Simon, who was disappointed.
"We hope that doesn't end the dialogue," Nolan said.
"This is just the beginning of the process. This is not the end of the the process," he said, adding that the company will be seeking other bidders as well.
Simon is likely to walk away, however, if the court approves the warrants, a source familiar with the matter said.
General Growth believes that court approval of the Brookfield-led investment would protect its downside and give it greater flexibility in negotiating with Simon, which has offered $6.5 billion for all of the company, another source familiar with the matter said early on Friday.
But General Growth understands that the warrants, worth several hundred million dollars, would make a competing bid more expensive and so it would be willing to negotiate with Simon on a price that adjusts for them, the source said.
A court-approved deal with Brookfield gives General Growth room to negotiate on antitrust issues with Simon that could arise from a merger of the two largest U.S. mall owners, the source said.
The sources declined to be named because the talks are not public.
ACKMAN'S ROLE
William Ackman's hedge fund Pershing Square Capital Management, which has committed to invest in General Growth alongside Brookfield, also confirmed the Reuters report, saying it agreed to forgo interim warrants to purchase 17 million shares. It said the move meant giving up $128 million of value.
Pershing Square said it was agreeing to forgo the warrants on the condition that the bankruptcy hearing would proceed and that warrants would still be issued to Fairholme Capital Management, the other investor in the group, and to Brookfield, as previously contemplated.
Ackman, who owns about a quarter of General Growth, said this would align his interests with other shareholders and eliminate the potential for the appearance of any conflict.
Still, the bankruptcy court's approval would get Ackman off the hook on interim protections Pershing Square agreed to provide to Brookfield as part of the Canadian firm's investment commitment.
Under terms announced in February, Pershing Square was obligated to pay Brookfield 25 percent of its profits from its investment in General Growth above $12.75 per share if the company did a deal with another party at more than that price.
Simon, teaming with Blackstone Group (BX.N), offered to buy General Growth for $20 per share, or $6.5 billion. It also offered to pay holders of $7 billion of General Growth unsecured debt in cash and assume about $18 billion in mortgages and other property-level debt.
Brookfield, Fairholme and Pershing have offered to make a $6.55 billion equity investment and $2 billion capital backstop to help General Growth exit bankruptcy protection.
That plan values a core General Growth at $10 per share, and envisages creation of a new entity to house certain non-income producing assets.
The entity, General Growth Opportunities, is being valued at $5 per share, and has been given that value by Simon under its offers as well.
General Growth's shares were off 2.5 percent at $15.45, while Simon was up 1.8 percent at $86.37, both during morning trading on the New York Stock Exchange. (Additional reporting by Dan Wilchins; Editing by Derek Caney and Steve Orlofsky) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)
reuters: ggp expected to back bam offer:
General Growth expected to back Brookfield offer
Companies:BROOKFIELD LVTG-AGeneral Growth Properties Inc.Simon Property Group Inc. Topics:Legal / Law Matters
A woman leaves a restaurant at Tyson's Galleria shopping mall in McLean, Virginia in this April 16, 2009 file photo. REUTERS/Jim Young
By Paritosh Bansal
NEW YORK (Reuters) - General Growth Properties Inc (NYSE:GGP - News) is expected to ask a bankruptcy court on Friday to approve an investment led by Brookfield Asset Management Inc (Toronto:BAMA.TO - News), after reducing a warrants package by 14 percent, a source familiar with the situation said.
The move would be a setback for Simon Property Group Inc (NYSE:SPG - News), which raised its bid for General Growth, hoping its "best and final" offer would persuade the target to favor its deal.
General Growth believes that court approval of the Brookfield-led bid would protect its downside and give it greater flexibility in negotiating with Simon Property Group Inc (NYSE:SPG - News), which has bid $6.5 billion to buy all of the company, the source said.
General Growth, however, understands that the warrants, which are worth several hundred million dollars, are a liability for another suitor and would be willing to negotiate with Simon on a price that adjusts for them, the source said.
The investment gives General Growth room to negotiate around antitrust issues with Simon that could arise from a merger of the two largest U.S. mall owners, the source said.
William Ackman's Pershing Square Capital Management, which has committed to invest in General Growth alongside Brookfield, agreed to forgo its interim warrants, reducing the overall package by 14 percent, the source said.
Fairholme Capital Management, the other investor in the group, and Brookfield will still have their warrants, the source said.
The source declined to be named because the talks are not public.
(Reporting by Paritosh Bansal; Editing by Derek Caney)
don't think $20/share will get it done.
have to believe that ggp will go forward with its scheduled mtg. with the judge tomorrow.
reuters' update:
UPDATE 1-General Growth wants Simon to raise bid -source
Thu May 6, 2010 12:02pm EDTStocks
General Growth Properties, Inc.
GGP.N
$16.15
-0.42-2.53%
9:51am EST
Simon Property Group, Inc.
SPG.N
$85.61
-2.87-3.24%
9:53am EST
Brookfield Asset Management Inc.
BAMa.TO
$25.10
-0.06-0.24%
9:41am EST
* GGP asked Simon for better price; may make trust offer
* GGP, Simon working on deal documents to be ready to go
* GGP board to weigh whether to postpone Friday hearing
* GGP shares off 2.3 pct, Simon down 3.4 pct (Rewrites throughout; adds details, background, share price, bylines)
By Paritosh Bansal and Ilaina Jonas
NEW YORK, May 6 (Reuters) - General Growth Properties Inc (GGP.N) has asked rival mall owner Simon Property Group Inc(SPG.N) to raise its $5.8 billion bid, a source familiar with the situation said.
General Growth's board is set to meet later on Thursday to weigh whether to postpone a bankruptcy court hearing in light of competing offers from Simon and investors led by Brookfield Asset Management Inc (BAMa.TO). The source added that nothing had been decided and talks continue with both parties.
Simon has offered to pay $18.25 per share for General Growth. It would also also pay holders of $7 billion in General Growth unsecured debt in cash and assume about $18 billion in mortgages and other property-level debt.
General Growth has asked Simon to come up with a higher price, which remains a 'big issue', the source said, adding that could be part of the board's deliberations if Simon did so.
The two sides have also had a meeting on antitrust issues, where Simon came up with a proposal to allay concerns around merging the two largest U.S. mall owners, the source said.
Simon rejected a counterproposal, but General Growth may now come back with a new counteroffer on antitrust issues, the source said.
The two sides have also been working on putting together merger documents so that they are ready to go should they reach a deal, the source said.
General Growth and Simon representatives were not immediately available for comment. The source is not named because the discussions are not public.
Brookfield, Fairholme Capital Management and Pershing Square Capital have offered to make a $6.55 billion equity investment and $2 billion capital backstop to help General Growth exit bankruptcy protection. In return, they will get warrants worth several hundred million dollars.
At Friday's hearing, General Growth would ask the bankruptcy judge to approve the Brookfield-led offer as a "stalking horse" bid, which would set a floor for other suitors.
The Brookfield commitment, however, expires on May 13, which is seen as the real deadline for General Growth to decide which way to go, the source said.
General Growth's shares were off 2.3 percent to $16.19 in noon trading, while Simon shares were down 3.4 percent to $85.50, both on the New York Stock Exchange. (Reporting by Paritosh Bansal and Ilaina Jonas, editing by Tim Dobbyn)
reuters reports ggp's bod to meet this afternoon.
may postpone tomorrow's hearing:
General Growth board to meet. talks ongoing-source
Thu May 6, 2010 11:01am EDTStocks
General Growth Properties, Inc.
GGP.N
$16.19
-0.38-2.29%
8:58am EST
Simon Property Group, Inc.
SPG.N
$86.58
-1.90-2.15%
8:50am EST
Brookfield Asset Management Inc.
BAMa.TO
$25.28
+0.12+0.48%
8:46am EST
NEW YORK, May 6 (Reuters) - General Growth Properties Inc's (GGP.N) board is expected to meet later Thursday to weigh whether to postpone a key hearing as it talks with suitors vying for a deal, a source familiar with the situation said.
The board will weigh whether to postpone a key hearing scheduled for Friday in light of the offers, the source said, adding that nothing had been decided.
General Growth is in talks with both Simon Property Group Inc (SPG.N) and Brookfield Asset Management Inc (BAMa.TO), which are leading competing bids for the second-largest U.S. mall owner, the source said.
General Growth has asked Simon to come up with a better price for a deal, the source said. General Growth may also come back to Simon with a new counterproposal on antitrust issues, the source added.
The two sides have also been working on putting together merger documents so that they are ready to go should they reach a deal, the source said.
Simon has offered to pay $18.25 per share, or $5.8 billion, for General Growth. It would also also pay holders of $7 billion in General Growth unsecured debt in cash and assume about $18 billion in mortgages and other property-level debt.
The source declined to be named as these discussions are not public. (Reporting by Paritosh Bansal and Ilaina Jonas, editing by Gerald E. McCormick) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)
ggp press release:
EX-99.1 6 a10-9414_1ex99d1.htm EX-99.1
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
General Growth Properties Submits Revised $6.55 Billion Investment and an
additional $2 Billion Backstop Offer From Brookfield, Pershing Square and
Fairholme, Seeks Court Approval for Bidding Procedures
Revised Agreement Provides Enhanced Transaction Terms and Deal Certainty
GGP’s Equity Committee Withdraws All Objections And Agrees to Support Brookfield-Led Proposal
CHICAGO, IL (May 3, 2010) — General Growth Properties, Inc. (NYSE: GGP) announced today that it will seek Bankruptcy Court approval of bidding procedures and compensation for the financial commitments to be provided pursuant to a revised $6.55 billion equity investment and $2 billion capital backstop offer from Brookfield Asset Management, Pershing Square Capital Management and Fairholme Funds. The Company will continue to consider competitive proposals and expects to select its plan for emergence from bankruptcy in early July.
“We are very pleased to recommend the Brookfield-led proposal as the transaction that offers the best opportunity at this time to maximize long-term value for stockholders while ensuring full payment to creditors,” said Adam Metz, Chief Executive Officer of GGP. “With the revised proposal, we have now secured commitments for all financing needed to emerge from bankruptcy. The Brookfield-led proposal also allows the Company to continue its process to solicit higher and better offers pursuant to the bid procedures to be approved by the Bankruptcy Court.”
The Official Committee of General Growth’s Equity Committee supports the revised Brookfield-led proposal and the relief requested in the motion. The investment offer remains subject to higher and better offers pursuant to a bidding process that is subject to approval by the Bankruptcy Court.
Terms of the Revised Brookfield-Led Proposal
Under the terms of the amended agreements, the Company expects to emerge from Chapter 11 as two separate companies: General Growth Properties (“New GGP”), which will own traditional shopping mall properties, and General Growth Opportunities (“GGO”), which will own a diverse portfolio of assets with attractive longer-term growth prospects. The investors would commit $6.3 billion of new equity capital at a value of $10.00 per share for New GGP and $250 million to backstop a rights offering for GGO at $5.00 per share to facilitate GGP’s emergence from bankruptcy.
The principal changes from the original proposal submitted by the Brookfield-led investors include:
· The investors have agreed to backstop an additional $2.0 billion of capital to be raised at closing, including $1.5 billion of debt and a $500 million equity rights offering;
· The interim warrants to be issued to the investment parties as part of the transaction will vest over time rather than immediately as follows:
· 40% upon Bankruptcy Court approval
· 20% on July 12
· Remainder would continue to vest pro rata through expiration of commitment;
· The permanent warrants will include 120 million 7-year warrants for reorganized GGP stock at a strike price of $10.50 and 80 million 7-year warrants for GGO at a strike price of $5.00; and
CONTACT: David Keating, Corporate Communications, (312) 960-6325, david.keating@ggp.com
--------------------------------------------------------------------------------
· Brookfield has agreed to enter into a strategic relationship agreement to use GGP as its primary platform for any regional mall opportunities it or its affiliates pursue in North America;
· Several closing conditions were eliminated or made less restrictive.
“We are pleased to reach this agreement with Brookfield, Pershing Square and Fairholme and view this as a critical step to create long-term value for the Company and its stockholders,” said Thomas H. Nolan, Jr., President and Chief Operating Officer of GGP. “Combined with the announcement last week that GGP has received approval to restructure substantially all of its secured mortgage indebtedness, we are well on our way to emerging from bankruptcy by the fall and beginning the next successful chapter for GGP and GGO.”
UBS Investment Bank and Miller Buckfire & Co., LLC served as financial advisors to General Growth Properties, and Weil, Gotshal & Manges LLP acted as legal counsel to the company.
simon looks to be out of contention:
http://biz.yahoo.com/e/100506/ggp8-k.html
while the bpf amendments needed to be filed, my guess is that ggp is going with the bpf deal when they present to the court tomorrow.
ggp adjourns hearing from 5/5 to 5/7
presumably to give more time to simon offer and or preparing a bfp counter. guess we will see later this week which one it is. still believe that standalone is the best option.
bam response to spg bid:
http://www.kccllc.net/documents/0911977/0911977100503000000000010.pdf
simon offers $18.25 for all of ggp:
Simon bids $5.8 billion for all of General Growth
Buzz up! 0 Print
Companies:BROOKFIELD LVTG-AThe Blackstone GroupGeneral Growth Properties Inc. Related Quotes
Symbol Price Change
BAMA.TO 23.57 +0.32
BX 14.43 +0.45
GGP 16.78 +1.08
SPG 92.78 +3.76
{"s" : "bama.to,bx,ggp,spg","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} On Monday May 3, 2010, 7:52 pm
By Paritosh Bansal and Ilaina Jonas
NEW YORK (Reuters) - Simon Property Group Inc (NYSE:SPG - News) has bid $5.8 billion for all of General Growth Properties Inc (NYSE:GGP - News), even as its offer to buy a minority stake in its rival was rejected, sources familiar with the matter said on Monday.
General Growth said it had accepted an investment plan led by Brookfield Asset Management (Toronto:BAMA.TO - News) over the one from Simon, but it was reviewing Simon's proposal to buy all of the company.
General Growth said its equity committee, which is a key constituency, backs its position on the Brookfield-led offer.
The company has a bankruptcy court hearing on Wednesday to get the Brookfield-led offer approved as a "stalking horse" bid, which would set a floor for other suitors, but Simon's move adds a fresh twist in the battle.
Simon has bid $18.25 per share for all of General Growth, more than double the $9 per share it initially offered, sources said. Simon will also pay holders of $7 billion in General Growth unsecured debt in cash and assume billions in mortgages and other property-level debt.
For General Growth investors to do better than Simon's offer under a recapitalization plan, they would have to value its properties higher than any of those of its U.S. peers, one of the sources said.
"The goal here was to basically say: 'How can you turn this down?" the source said.
Simon teamed up with private equity firm Blackstone Group LP (NYSE:BX - News) to make the bid for all of General Growth, the sources said. Blackstone has committed more than $1 billion to support a Simon deal, the first source said.
Simon structured the offer for the entire company along the lines first used by Brookfield -- a core General Growth, comprised of its vast collection of malls, and General Growth Opportunities, they said.
General Growth Opportunities would be a new entity created to house certain General Growth non-income producing assets. It would be treated as it is under the Brookfield offer, the sources added.
Simon offered $13.25 per share -- $3.25 per share in cash and $10 per share in stock -- for the core of General Growth, the sources said. General Growth has valued General Growth Opportunities (GGO) at another $5 per share. One of the sources said Simon had not ascribed a value to GGO.
A merger would bring together the No. 1 and No. 2 U.S. mall operators. Simon owns or has interest 381 properties in North America, Europe and Asia. General Growth owns about 200 properties, chiefly in the United States.
To allay antitrust concerns in a takeover, Simon committed to divest up to 15 million square feet, up from the 10 million square feet it offered earlier, the second source said. An average regional mall runs about 400,000 to 800,000 square feet. General Growth's Fashion Show in Las Vegas is nearly 2 million square feet.
Simon and Blackstone declined to comment, while General Growth was not immediately available.
SIMON RECAP OFFER
Simon also gave General Growth an offer to recapitalize the company and replace Brookfield as a key investor to help the bankrupt company emerge independently, but that was turned down.
Under that bid, Simon offered to bankroll General Growth's exit on terms similar to those under the Brookfield-led bid.
But investors under the Brookfield offer are getting warrants worth several hundred million, while Simon would make the investment without any warrants.
Simon also got a new investor to join its recapitalization bid, with the Texas Teachers fund agreeing to contribute $650 million to Simon's deal for General Growth, one source said.
It had already lined up hedge fund Paulson & Co, ING Clarion Real Estate Securities, Oak Hill Advisors, Deutsche Bank's (XETRA:DBKGN.DE - News) RREEF and Taconic Capital Advisors for $2.1 billion.
The idea behind the two-pronged approach was to have the recapitalization bid as a backup should a deal for the whole company run into regulatory issues, the sources said.
BROOKFIELD-LED BID
General Growth said it would back a revised offer from Brookfield, Fairlhome Capital Management and Pershing Square Capital.
The revisions include investors agreeing to backstop an additional $2 billion of capital to be raised at closing, including $1.5 billion of debt and a $500 million equity rights offering.
Moreover, the investors will now be given interim warrants in a phased manner as against all at once, with 40 percent given upon court approval, 20 percent on July 12 and the rest pro-rata through the expiration of their commitment.
The permanent warrants will include 120 million seven-year warrants for reorganized General Growth stock at a strike price of $10.50 and 80 million seven-year warrants for General Growth Opportunities at a strike price of $5.
Simon shares closed up 4.2 percent, or $3.76, at $92.78, while General Growth was up 6.9 percent, or $1.08, at $16.78.
(Reporting by Paritosh Bansal and Ilaina Jonas
ggp press release:
Press Releases
General Growth Properties Submits Revised $6.55 Billion Investment and an Additional $2 Billion Backstop Offer From Brookfield, Pershing Square & Fairholme, Seeks Court Approval for Bidding Procedures
5/3/2010
David Keating
Senior Director
Corporate Communications
(312) 960-6325
Revised Agreement Provides Enhanced Transaction Terms and Deal Certainty
GGP’s Equity Committee Withdraws All Objections And Agrees to Support Brookfield-Led Proposal
CHICAGO, IL (May 3, 2010) — General Growth Properties, Inc. (NYSE: GGP) announced today that it will seek Bankruptcy Court approval of bidding procedures and compensation for the financial commitments to be provided pursuant to a revised $6.55 billion equity investment and $2 billion capital backstop offer from Brookfield Asset Management, Pershing Square Capital Management and Fairholme Funds. The Company will continue to consider competitive proposals and expects to select its plan for emergence from bankruptcy in early July.
"We are very pleased to recommend the Brookfield-led proposal as the transaction that offers the best opportunity at this time to maximize long-term value for stockholders while ensuring full payment to creditors," said Adam Metz, Chief Executive Officer of GGP. "With the revised proposal, we have now secured commitments for all financing needed to emerge from bankruptcy. The Brookfield-led proposal also allows the Company to continue its process to solicit higher and better offers pursuant to the bid procedures to be approved by the Bankruptcy Court."
The Official Committee of General Growth's Equity Committee supports the revised Brookfield-led proposal and the relief requested in the motion. The investment offer remains subject to higher and better offers pursuant to a bidding process that is subject to approval by the Bankruptcy Court.
Terms of the Revised Brookfield-led Proposal
Under the terms of the amended agreements, the Company expects to emerge from Chapter 11 as two separate companies: General Growth Properties ("New GGP"), which will own traditional shopping mall properties, and General Growth Opportunities ("GGO"), which will own a diverse portfolio of assets with attractive longer-term growth prospects. The investors would commit $6.3 billion of new equity capital at a value of $10.00 per share for New GGP and $250 million to backstop a rights offering for GGO at $5.00 per share to facilitate GGP's emergence from bankruptcy.
The principal changes from the original proposal submitted by the Brookfield-led investors include:
• The investors have agreed to backstop an additional $2.0 billion of capital to be raised at closing, including $1.5 billion of debt and a $500 million equity rights offering;
• The interim warrants to be issued to the investment parties as part of the transaction will vest over time rather than immediately as follows:
o 40% upon Bankruptcy Court approval
o 20% on July 12
o Remainder would continue to vest pro rata through expiration of commitment;
• The permanent warrants will include 120 million 7-year warrants for reorganized GGP stock at a strike price of $10.50 and 80 million 7-year warrants for GGO at a strike price of $5.00; and
• Brookfield has agreed to enter into a strategic relationship agreement to use GGP as its primary platform for any regional mall opportunities it or its affiliates pursue in North America;
• Several closing conditions were eliminated or made less restrictive.
"We are pleased to reach this agreement with Brookfield, Pershing Square and Fairholme and view this as a critical step to create long-term value for the Company and its stockholders," said Thomas H. Nolan, Jr., President and Chief Operating Officer of GGP. "Combined with the announcement last week that GGP has received approval to restructure substantially all of its secured mortgage indebtedness, we are well on our way to emerging from bankruptcy by the fall and beginning the next successful chapter for GGP and GGO."
UBS Investment Bank and Miller Buckfire & Co., LLC served as financial advisors to General Growth Properties, and Weil, Gotshal & Manges LLP acted as legal counsel to the company.
ABOUT GGP
GGP currently has ownership interest in or management responsibility for more than 200 regional shopping malls in 43 states, as well as ownership in planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company’s common stock is traded on the New York Stock Exchange under the symbol GGP.
ggp's bod gives nod to bam, kapow's spg
http://online.wsj.com/article/SB10001424052748704342604575221401268472286.html?ru=yahoo&mod=yahoo_hs
reuters:ggp's bod to meet sunday to decide on bids
General Growth board to vote on bids this weekend-source
* GGP board meeting more likely Sunday
* Board weighs quantitative, qualitative factors
By Paritosh Bansal
NEW YORK, May 1 (Reuters) - General Growth Properties Inc's (GGP.N) board is expected to vote this weekend on choosing between two rival recapitalization offers, a source familiar with the situation said on Saturday.
The board of General Growth is more likely to meet on Sunday for a vote on the capital proposals led by Brookfield Asset Management (BAMa.TO) and Simon Property Group Inc (SPG.N), the source said.
General Growth, the second-largest U.S. mall owner, has submitted a plan in court to exit bankruptcy backed by Brookfield. But Simon, its larger rival, has come up with a competing offer.
The Brookfield-led plan, which also includes investments from Pershing Square Capital Management and Fairholme Capital Management, commits $6.5 billion to help General Growth exit Chapter 11, but the investors are also asking for warrants worth several hundred million dollars as part of a deal.
Simon has offered to make that investment on similar terms but without any warrants.
General Growth's board is comparing quantitative factors as well as more subjective factors in deciding which way to go, the source said, adding that it was getting closer to deciding.
Both Brookfield and Simon have made arguments on subjective, qualitative factors, the source said.
The qualitative factors include issues such as what it would mean for General Growth to have its rival holding a stake in it.
Simon has tried to allay that concern by stressing that it would be a passive shareholder and has taken measures that include reducing its voting stake and proposing independent directors for General Growth's board should its bid succeed.
General Growth has scheduled a bankruptcy court hearing on May 5 to get the proposal it chooses approved as a so-called "stalking horse" bid, which sets the floor for any other offers for the company.
A General Growth spokesman could not be reached immediately on Saturday. The source is anonymous because these discussions are not public. (Reporting by Paritosh Bansal; Editing by Xavier Briand) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)
hey, thanks for the summary.
i was unable to watch the segment and appreciate the comments you made on ackman's appearance. certainly hope we come out as a standalone. re: ackman's comment about emergence by september, even if ggp files its por with the court by the end of may it will probably be 60-90 days before the court gives its formal approval so i don't view ackman's september emergence comment as any significant change in what has been previously said.
ackman on cnbc from 7:00am to 9:am today
can't watch the whole segment but can not imagine he will not comment on ggp. anyone who picks this up if he comments, please post. thanks.
just wondering, did you read msg 3620?
simon offers to back ggp, no warrants!
Simon Property Group Offers to Invest $2.5 Billion in General Growth Reorganization Plan at Same Per Share Price as Existing Brookfield-Sponsored Proposal
INDIANAPOLIS, April 14 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (NYSE: SPG) ("SPG") today sent a letter to General Growth Properties, Inc. (NYSE: GGP) ("GGP") offering to invest $2.5 billion in a General Growth reorganization at the same per share price as the plan of reorganization sponsored by Brookfield Asset Management. SPG's proposal is substantially more favorable to GGP and its equityholders than the currently proposed plan of reorganization because it would eliminate the highly dilutive warrants that GGP proposes to issue to Brookfield, Pershing Square and Fairholme Capital. SPG's proposal also includes a $1 billion co-investment commitment by Paulson & Co.
Following is the text of the letter sent today by Simon Property Group to General Growth:
April 14, 2010
Mr. Adam Metz
Chief Executive Officer
General Growth Properties, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Dear Adam:
This will formally confirm that Simon Property Group is prepared to participate in the recapitalization of General Growth Properties in the same format as the proposed plan of reorganization sponsored by Brookfield Asset Management, but on a basis very substantially more favorable to GGP and its equityholders, as outlined below.
Consideration. Simon would acquire 250,000,000 shares of common stock in GGP for $2.5 billion in the aggregate, or $10.00 per share, the same amount as Brookfield would acquire, at the same price, pursuant to its Cornerstone Investment Agreement. Simon would also backstop the GGO rights offering as contemplated in the Brookfield sponsored recapitalization, and would otherwise enter into agreements on the same basis as Brookfield with respect to the recapitalization of GGP and the spin-off of GGO, subject to the adjustments for the benefit of GGP outlined herein.
Warrants. Simon would not receive any warrants or similar payment or fees in respect of its commitment to invest in GGP, either on an interim basis, or as part of the post-reorganization consideration to be issued to Simon in respect of its investment. GGP's equityholders would accordingly not suffer the dilution contemplated by the Brookfield investment, and their ongoing interest in GGP would be substantially more valuable. We estimate that this benefit could be at least $895 million, or $2.75 per share based on today's share count.
Governance. In order to ensure that GGP remains an independent company for all regulatory purposes and avoid the interposition of any challenge to the proposed transaction, Simon is prepared to agree to the limits on its governance rights described in Annex A. These governance mechanisms - which you and your counsel should find familiar from other similar situations - will obviate any possible concern about Simon exercising inappropriate or unreasonable influence over the reorganized GGP. Our counsel are of course prepared to discuss these matters with yours.
Co-Investors. If Pershing Square and Fairholme will agree to amend their investment agreements with GGP to forego the warrants currently contemplated by those agreements, Simon would welcome them as co-investors in GGP's recapitalization. However, a number of alternative sources of capital are interested in co-investing in GGP with Simon, on such terms, in their stead. Pursuant to the attached letter from Paulson & Co. Inc., Paulson is prepared to co-invest at least $1 billion with Simon in connection with a Simon sponsored recapitalization of GGP. In order to ensure the success of GGP's recapitalization, in addition to working with GGP to negotiate and finalize the revised Pershing Square and Fairholme co-investment commitments or replacements thereof, Simon will itself fully backstop the entire amount of such co-investment commitments, without any warrants, as well as backstopping an additional $125 million investment in GGO as Pershing Square and Fairholme are currently contemplated to do. However, it is not Simon's intent to gain control of GGP pursuant to this backstop obligation, and, as set forth on Annex A, Simon would agree not only to seek the disposition of any shares issued with respect to its backup commitment as promptly as practicable, but also to the effective sterilization of such interest for voting and control purposes prior to such disposition. Simon's voting interest in GGP would generally be limited to 20% of the outstanding shares.
No Financing or Other Contingencies. There will be no financing condition whatsoever to Simon's obligations to close the transaction. Simon, which has an equity market capitalization in excess of $27 billion, $3.5 billion of available cash on its balance sheet, and $3.3 billion of available borrowing capacity under its revolving credit facility, and would be fully and immediately responsible for its commitment and backstop obligations, in distinction to Brookfield, which does not seem to have yet delivered an equity commitment to the shell subsidiary with which GGP contracted and seems to be entirely free to walk away from the agreed deal. Simon's investment would not be contingent on any vote of Simon shareholders, and Simon will not require any commitment or other fee in respect of its equity investment commitment in the recapitalization of GGP.
Improvement to Brookfield Terms. Except as specified herein, the terms of Simon's commitment to invest in GGP would be substantially identical to Brookfield's obligations pursuant to the Brookfield investment agreement and the other agreements contemplated thereby. Our proposed form of investment agreement is attached, along with a comparison to the Brookfield agreement.
If you are interested, we remain prepared to discuss with you instead an acquisition of GGP in a fully-financed transaction.
We look forward to hearing from you and to working together to consummate a transaction.
Very truly yours,
David Simon
Chairman of the Board and
Chief Executive Officer
cc: Board of Directors, General Growth Properties, Inc.
Official Committee of Equity Security Holders
Official Committee of Unsecured Creditors
Jackson Hsieh, UBS Investment Bank
About Simon Property Group
Simon Property Group, Inc. is an S&P 500 company and the largest real estate company in the U.S. The Company currently owns or has an interest in 381 properties comprising 260 million square feet of gross leasable area in North America, Europe and Asia. Simon Property Group is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. The Company's common stock is publicly traded on the NYSE under the symbol SPG. For further information, visit the Simon Property Group website at www.simon.com.
About Paulson & Co. Inc.
Paulson & Co. Inc. is a New York-based investment management firm with approximately $32 billion under management across merger, event and credit strategies. One of Paulson & Co's core strategies is providing capital to companies as they emerge from bankruptcy so that they can operate with a deleveraged balance sheet allowing them to prosper in the future.
Forward-Looking Statements
Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, changes in value of investments in foreign entities, the ability to hedge interest rate risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.
SOURCE Simon Property Group, Inc.
i think that simon has been engaged with ggp's mgmt over the last 7-10 days and probably made another lowball offer which was rejected. he's going public in this way just like he did last time. i believe the bidding rules laid out in that 550 page document required any bidder to agree to keep its bids confidential until such time as all bids were received. if simon did in fact make another bid he can not come out and say he offered "x" amount and that it was rejected so he goes about it this way.
even if this company comes out of bk at $15/share as currently anticipated under the bam, pershing, fairfield deal, i think, as a stockholder, i am better off with that since i can experience the upside over then next 2-3 years.
give simon a handkerchief and change his diaper and let's move on.
david simon whines again:
$$ Simon’s Latest GGP “Threat”
ToddSullivan April 12th, 2010 David Simon has grown tedious….
Let’s first go back and read this post from February.
The news today is that Simon is considering once again “walking away” from the GGP. I guess this is in case we still do not believe him after his previous threats? The situation is simply one of two scenario’s.
1- A blatant attempt to negatively manipulate the stock price to get shareholders to pressure management to take whatever deal he comes up with.
2- Acknowledgment any “partners” he was trying to line up have not materialized.
Let’s address the folly of #1. Who is he trying to scare into selling out to him on the cheap? Ackman, Bucksbaum, Tilson, Elliot, management who owns material stakes, Sullivan? Who? There are not enough shareholders outside of the major holders to scare into forcing management to take a inferior offer from Simon. There just isn’t. David Simon is playing from a playbook that simply is not applicable to the game currently being played. It is the equivalent of trying to run the option offense in the NFL, not going to get it done David.
If #1 isn’t his goal, then why say anything? Why? What purpose does it serve? What is he trying to accomplish? Either make a bid or say you are backing out, otherwise, keep quiet. EVERYONE knows Simon wants GGP more than any deal he has ever done. Period. Any statement he is making to the contrary is simply untruthful UNLESS…….
Enter #2.
For a while now we have been hearing Simon was talking to “potential partners” regarding their participation in another (hopefully this time serious) offer for GGP in its entirety. IF David Simon is serious in his consideration in walking away then it HAS to be because those potential partners he was talking to have essentially told him to “go screw”.
Everyone has had access to GGP data room for about a month now. Everyone knows the potential value of it and everyone has developed their own price for it. Let me ask you a question. If you were the China Investment Corp, Abu Dabi or John Paulson or any other of the various entities rumored to be involved, if you could pull off a deal on your own (all of the above entities could) why would you want to have David Simon as a partner?
Simply based on his behavior throughout this entire process to date he is only someone you partner with because he is your only option. If you wanted a partner, wouldn’t you go to the Brookfield Boys (Brookfield Asset Management), who have behaved with class since day 1 and attempt to partner with them? Wouldn’t that option seem to hold the far less potential for future conflict/aggravation?
You have essentially two very experienced mall management groups bidding for GGP. Brookfield and Simon. Who would you rather be a partner with? Me too….
David Simon has behaved since last fall as though acquiring GGP was his birthright and I can only guess this attitude has been expressed very clearly to potential partners. His public tantrums at every turn when GGP did not bow gracefully in acceptance at his every utterance and overture are evidence enough of that for me. I can also guess this attitude was not received very well by those potential partners.
Do I care if Simon backs out? No. Being honest, I wish he would just to stop this infantile drama. Do I can if another bid does not develop? No. I am very happy to own this when it emerges and participate in the future of an independent GGP/GGO combination, very happy…
My guess is that the vast majority of shareholders feel the same way which is why Simon is pounding his head on the table at not getting the “distressed sale” he thought he would…..
david simon whines again:
$$ Simon’s Latest GGP “Threat”
ToddSullivan April 12th, 2010 David Simon has grown tedious….
Let’s first go back and read this post from February.
The news today is that Simon is considering once again “walking away” from the GGP. I guess this is in case we still do not believe him after his previous threats? The situation is simply one of two scenario’s.
1- A blatant attempt to negatively manipulate the stock price to get shareholders to pressure management to take whatever deal he comes up with.
2- Acknowledgment any “partners” he was trying to line up have not materialized.
Let’s address the folly of #1. Who is he trying to scare into selling out to him on the cheap? Ackman, Bucksbaum, Tilson, Elliot, management who owns material stakes, Sullivan? Who? There are not enough shareholders outside of the major holders to scare into forcing management to take a inferior offer from Simon. There just isn’t. David Simon is playing from a playbook that simply is not applicable to the game currently being played. It is the equivalent of trying to run the option offense in the NFL, not going to get it done David.
If #1 isn’t his goal, then why say anything? Why? What purpose does it serve? What is he trying to accomplish? Either make a bid or say you are backing out, otherwise, keep quiet. EVERYONE knows Simon wants GGP more than any deal he has ever done. Period. Any statement he is making to the contrary is simply untruthful UNLESS…….
Enter #2.
For a while now we have been hearing Simon was talking to “potential partners” regarding their participation in another (hopefully this time serious) offer for GGP in its entirety. IF David Simon is serious in his consideration in walking away then it HAS to be because those potential partners he was talking to have essentially told him to “go screw”.
Everyone has had access to GGP data room for about a month now. Everyone knows the potential value of it and everyone has developed their own price for it. Let me ask you a question. If you were the China Investment Corp, Abu Dabi or John Paulson or any other of the various entities rumored to be involved, if you could pull off a deal on your own (all of the above entities could) why would you want to have David Simon as a partner?
Simply based on his behavior throughout this entire process to date he is only someone you partner with because he is your only option. If you wanted a partner, wouldn’t you go to the Brookfield Boys (Brookfield Asset Management), who have behaved with class since day 1 and attempt to partner with them? Wouldn’t that option seem to hold the far less potential for future conflict/aggravation?
You have essentially two very experienced mall management groups bidding for GGP. Brookfield and Simon. Who would you rather be a partner with? Me too….
David Simon has behaved since last fall as though acquiring GGP was his birthright and I can only guess this attitude has been expressed very clearly to potential partners. His public tantrums at every turn when GGP did not bow gracefully in acceptance at his every utterance and overture are evidence enough of that for me. I can also guess this attitude was not received very well by those potential partners.
Do I care if Simon backs out? No. Being honest, I wish he would just to stop this infantile drama. Do I can if another bid does not develop? No. I am very happy to own this when it emerges and participate in the future of an independent GGP/GGO combination, very happy…
My guess is that the vast majority of shareholders feel the same way which is why Simon is pounding his head on the table at not getting the “distressed sale” he thought he would…..
good news/bad news
am sure the story about las vegas property value declines is playing out everywhere ggp owns properties but that's not all bad news in the short term. with declining property values comes the ability for property owners to appeal the amount of real estate taxes which they are paying.
while we are waiting for the values to recover, the reduced tax burden should flow to ggp's bottom line helping out the noi. as property values increase and the accompanying r/e tax increases, the underlying value of the property will drive up the asset values on ggp's balance sheet and the stock price should benefit as a result.
$12.5 billion in appraised value lost
By Buck Wargo (contact), In Business reporter
Fri, Apr 9, 2010 (3 a.m.)
The 25 largest taxpayers in Clark County lost a combined $12.5 billion in appraised value on their properties in 2010, according to new tax rolls released by the Clark County assessor’s office.
The value of appraised properties among the top 25 as of April 1 totaled $41.2 billion, down from $53.7 billion a year ago, a 23 percent decline. The numbers include land and buildings only and not the property inside the buildings.
General Growth Properties, which owns several malls and property in Summerlin, fell to No. 7 with $1.5 billion. It was No. 3 with $4.7 billion a year ago.