Deals

Brookfield makes $657m bid for US mall owner

The proposed acquisition of Rouse Properties would mark the Toronto-based alternative asset manager’s third takeover bid of a REIT in the past year.

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Brookfield Asset Management has made an unsolicited bid to buy New York-based real estate investment trust Rouse Properties for approximately $657 million.

The Toronto-based alternative asset manager said Tuesday that one of its real estate funds had made a proposal to acquire Rouse’s common shares for $17 a share. The proposed price represents a 26 percent premium to the closing price of the REIT’s stock on January 15.

“Our offer provides an attractive opportunity for Rouse shareholders to realize a significant premium to recent public market pricing,” said Brian Kingston, chief executive of Brookfield Property Group, in a statement. Brookfield Property Partners currently owns approximately 33 percent of Rouse’s outstanding company stock and has seats on the company’s board.

Brookfield presented its buyout proposal to Rouse’s board on January 16. That same day, Rouse’s board established a special committee to evaluate, accept, reject or negotiate the proposal; explore and solicit other proposals; or explore and evaluate alternatives to Brookfield’s proposal.

Rouse is one of the largest publicly traded regional mall owners, with a portfolio that includes 35 malls and shopping centers in 21 states and totals approximately 24.1 million square feet. In 2012, Rouse spun out of General Growth Properties, which a Brookfield-led consortium had recapitalized for $2.625 billion in equity in 2010.

The buyout bid for Rouse marks Brookfield’s third takeover attempt of a REIT in a year. Last August, Brookfield acquired Cleveland-based apartment owner Associates Estates Realty Corporation in a deal that was valued at approximately $2.5 billion. The alternative asset manager also launched last February a tender offer with Brazilian investment bank BTG Pactual to gain control of Brazilian listed real estate company BR Properties. When that bid failed, Brookfield subsequently negotiated a deal to buy a portfolio of office properties in Rio de Janeiro and São Paulo from BR Properties.