General Growth Properties rejects $10B Simon Property Group bid 

Posted: 10:36 am Wed, February 17, 2010
By Robbie Whelan
Daily Record Business Writer

General Growth Properties Inc., the ailing developer that owns 10 of the Baltimore area’s most-visited malls, has rejected a $10 billion takeover offer from Simon Property Group LP, its closest competitor, but invited its suitor to make another offer.

In a letter addressed to SPG chief David Simon and made public late Tuesday, General Growth CEO Adam Metz  said that he was still considering a sale of the entire company or a “capital raise,” but that GGP was still exploring its options, and that the company “would like to include Simon as part of this process.”

“We and our board of directors have given considerable thought to your indication of interest and have concluded based on discussions with other interested parties that it is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the [c]ompany’s stakeholders,” Metz wrote.

Simon’s $10 billion, all-cash offer would have put the value of GGP’s stock at about $9 per share, or 25 percent lower than it was valued at the end of the day Tuesday in over-the-counter trading.

It also would have made whole all of GGP’s unsecured creditors. GGP filed for Chapter 11 bankruptcy protection last April after failing to refinance billions of dollars in commercial mortgage debt. It was the largest-ever real estate bankruptcy in U.S. history.

In Baltimore, General Growth owns 10 mall properties, including Towson Town Center, Harborplace and The Gallery, The Mall at Columbia, The Village of Cross Keys. Simon owns Arundel Mills.