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Brookfield strikes US$15.3bln deal to take over mall operator General Growth Properties

The deal arises only four months after GGP rebuffed a US$14.8bln cash and stock offer by Brookfield
Bloomingdale's store
Bloomingdale's is one of General Growth Properties' tenants

Brookfield Property Partners LP (NASDAQ:BPY), the commercial real estate group, has struck a US$15.3bln deal to take over the remaining 66% of mall operator General Growth Properties Inc (NYSE:GGP) that it does not already control, according to multiple US press reports.

The deal arises only four months after a special committee appointed by GGP’s board rebuffed a US$14.8bn combined cash-and-stock offer from Brookfield, which already owns 34% of GGP, calling it inadequate, according to Reuters.

Struggling retail sector

The tie-up also comes at a time when the retail sector is struggling and malls like those owned by GGP – which counts Bloomingdale’s, Barney’s New York and Tiffany & Co as clients - are finding it difficult to keep stores on as tenants.

Under the terms of the latest agreement, shareholders in GGP will have the option of getting US$23.50 in cash for each share, or a share in Brookfield or new real estate investment trust (REIT) to be launched, according to Reuters. Brookfield’s cash consideration now totals US$9.25bln, with cash accounting for 61% of the deal.

Previously, Brookfield had put forward an offer of US$23 per share and its total cash consideration was a bit less at US$7.4bln, amounting to just 50% of the deal, according to the Wall Street Journal.

In morning trade, Brookfield shares lost 4.18% at US$18.58 while shares in General Growth Partners fell 3.7% to US$20.43.

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