The Blackstone Group is being linked with a $10 billion bid for stricken mall operator General Growth Properties.
Bloomberg suggested that Simon Property Group, which is aiming to take over the bankrupt real estate investment trust GGP, has held discussions with the private equity firm about participating in its bid.
Simon made public its unsolicited $10 billion bid for the firm this week, $9 billion of which would be funded by cash from operations. The bid has won the support of unsecured GGP creditors as it would pay them at par and challenges GGP’s own bankruptcy reorganisation plan, which could include a sale of the company as well as a capital raise.
GGP this week hit back at Simon's offer describing the bid as “not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 [bankruptcy protection] and maximise value for all [GGP] stakeholders”.
Analysts suggest a bidding war could ensue, with Brookfield Asset Management named by one Reuters report as a potential interested party. Simon was in very early stage talks with Blackstone to explore the possibility of the private equity firm co-investing in its bid for GGP, another Reuters report added. Reports today though have stressed GGP's eagerness to raise equity in the public markets – a highly unusual move for a company working through bankruptcy.
GGP and hundreds of its malls filed for bankruptcy in April last year. In December, GGP reached agreement to reorganise $9.7 billion of debt secured against its shopping centres, offices and other real estate assets. GGP, the US’ second largest mall owner, has the exclusive right to come up with its own reorganisation plan until late February.
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