Bankrupt mall operator General Growth Properties Inc. said Thursday that it declined Simon Property Group Inc.’s $10 billion offer to purchase the firm.
GGP chief executive officer Adam Metz said in a letter to David Simon, his counterpart at Simon, that “your objectives are not aligned with ours,” but added he hoped Simon would participate in the restructuring process getting under way.
“As we have previously stated, our objective is to maximize value for the company and its stakeholders, and we are engaging in a process that is intended to accomplish that result in an expeditious manner,” Metz wrote.
The move came a day after Simon urged serious talks between his firm, the nation’s largest mall operator, and its next biggest competitor.
Simon declined to comment on GGP’s response.
Simon, which made its unsolicited offer on Tuesday, said in its letter on Wednesday that the $10 billion offer is “firm” and “fully financed” and offers an immediate full cash recovery to unsecured creditors, plus “more than $9 per share in value to shareholders.” Simon has said General Growth’s unsecured creditors committee, representing parties owed about $7 billion, supports the offer.
Simon also emphasized in its note that the firm’s offer is “not open-ended,” discouraging the hope Simon might return with a more lucrative offer.
“They are just having a war of words. Things are heating up,” said RBC Capital Markets real estate analyst Rich Moore, who said speculation has continued about Simon teaming up with private equity firm Blackstone Group LP to buy GGP.
Brookfield Asset Management, a Canadian real estate firm that holds $1 billion of GGP’s unsecured debt, is said to be interested in refinancing the company, and remains a major player in this story, Moore said.
Sydney-based Westfield Group has also been cited as an interested party.
“It’s like throwing a steak into a pit of wolves,” Moore said of the “vulnerable” GGP, but “this is all in the hands of the bankruptcy judge.”
Chicago-based GGP, which in April filed the biggest real estate bankruptcy in U.S. history with a $27 billion debt load, asked the judge to extend its Feb. 26 deadline to submit a reorganization plan to Aug. 26. If the extension is not granted, creditors would be able to submit competing plans after the current deadline expires.
Simon’s bid for GGP is for less money than GGP paid for Rouse Co. in 2004, when it dished out $12.6 billion, including the assumption of $5.4 billion of debt, to buy a smaller competitor with prestige properties.
On Thursday, Simon’s shares closed at $77.22, up $1.37, or 1.8 percent, while GGP’s finished trading at $12.69, down 23 cents, or 1.8 percent.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast