GGP Stockholders Approve $9B Brookfield Deal
The price disappointed analysts that had expected to see more of a premium for the class A assets.
NEW YORK CITY–GGP shareholders have voted to approve the proposed takeover of the REIT by Brookfield Property Partners paving the way for the $9.25 billion acquisition to close.
This March Brookfield Property Partners and GGP announced they entered into a definitive agreement for Brookfield to acquire the rest of the shares of GGP that it doesn’t already own. The cash-and-stock deal entitles GGP shareholders to receive $23.50 in cash or stock in either Brookfield or the new REIT that will be formed when the deal closes.
Brookfield Property publicly announced an offer to acquire the remaining shares that it didn’t already own of GGP in November 2017, at $23 per share or $7.4 billion. GGP rejected the offer but talks continued behind the scenes between the two companies.
Brookfield currently owns about 34% of GGP’s stock.
Brookfield said in November that acquisition of GGP would create one of the world’s largest listed property companies. The combined company would have an ownership interest in almost $100 billion of real estate assets globally and annual NOI of approximately $5 billion.
Some analysts are disappointed with the price being paid for GGP’s remaining shares as it ignores the industry theory that class A assets should trade at a premium.
For example, when the deal was first announced BTIG wrote that:
GGP management has clearly stated on numerous occasions to shareholders that its assets are worth substantially more than where its shares are currently trading. We are surprised that the Special Committee has unanimously approved the new offer and recommends that the GGP shareholders approve the proposed terms.
Little has changed in its thinking. On Thursday after the news was announced BTIG said the final offer was:
Very inadequate relative to the underlying value of the real estate.