stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Brookfield aims to expand retail footprint with GGP bid
space
Property owner offers to buy remaining shares of U.S. real estate firm in $14.8-billion cash-and-stock deal
space
By RACHELLE YOUNGLAI
  
  

Email this article Print this article

space  Advertisement
space

Tuesday, November 14, 2017 – Page B1

Brookfield Property Partners is betting on shopping centres at a time when malls are under pressure from online retailers, and big departments stores are overhauling their businesses.

The Canadian property owner announced on Monday an unsolicited $14.8-billion (U.S.) cash-andstock bid to buy the rest of U.S. retail real estate company GGP Inc. it does not own - an acquisition that would give Brookfield "an ownership interest in almost $100billion of premier real estate assets globally," the company said.

The proposal comes amid a shakeout in the bricks-and-mortar retail industry, particularly in the United States, where malls have been hit by the rise of e-commerce.

Canada's retail scene is also changing rapidly; Sears Canada Inc. was recently forced into liquidation and fellow department-store chain Hudson's Bay Co. is working to reinvent itself.

The acquisition would give Brookfield control over what it called GGP's "irreplaceable assets" and a "high-quality retail asset base." The Chicago-based company owns malls in nearly every U.S. state, including several in New York, Florida, Texas, Georgia and California.

Brookfield, which owns 257 properties in the Americas, Asia, Australia and Europe, said the combination of its experience and access to capital would allow it to "maximize" the value of GGP's shopping centres by expanding or transforming the malls.

"While many retailers continue to face significant challenges in growing their businesses, those retailers that are focused on the intersection between bricks-and-mortar retail and online sales channels continue to expand and grow," Brookfield chief executive officer Brian Kingston said last week on a call to discuss quarterly results.

Brookfield is offering GGP stockholders the option of receiving either $23 cash for each share, or 0.9656 of a limited-partnership unit of the Canadian company.

Brookfield said its cash proposal represents a 21-per-cent premium over GGP's Nov. 6 closing price of $19.01, the day before news of the going-private transaction became public.

After Brookfield confirmed the bid on Monday, GGP stock climbed above the offer price and ended the day at $24.05 a share in New York, suggesting shareholders expected a higher offer to emerge. Brookfield units fell 5 per cent to $22.50 apiece.

Brookfield and its affiliates already control about 34 per cent of the outstanding stock.

If the proposal succeeds, GGP shareholders would own about onethird of the combined company.

Brookfield Property and its parent company currently hold three of the nine GGP board seats.

Brookfield presented the offer to GGP's board of directors over the weekend. GGP said on its website that its board would review and consider the proposal. Both companies separately said there were no assurances that a deal would be consummated.

This is the latest going-private transaction for Brookfield. Earlier this year, the company took Brookfield Canada Office Properties private in a deal that was achieved after Brookfield Property sweetened the offer.

Brookfield has been gobbling up stakes in malls as well as large spaces vacated by retailers such as Sears.

This is the company's first attempt to significantly expand beyond office towers and multifamily buildings into shopping centres.

"Well-located, high-quality retail real estate in the United States continues to perform well despite negative perception in the public markets," Brookfield's Mr. Kingston said on last week's conference call.

Many shopping centres are struggling to fill empty spaces as they compete with online retailer Amazon and discount stores.

In Canada, mall owners are bracing for a flood of empty retail space from Sears Canada's liquidation. Hudson's Bay recently brokered a deal to sell a prime Manhattan department store building to office-sharing company WeWork and plans to lease some of its space in key HBC locations in Toronto and Vancouver.

Brookfield has capped the cash offering at $7.4-billion and the number of Brookfield shares at 309 million, which it said was worth roughly the same amount.

Brookfield Property Partners (BPY)

Close: $22.50 (U.S.), down $1.18

GGP (GGP)

Close: $24.05 (U.S.), up $1.85

Associated Graphic

Brookfield says acquiring Chicago-based real estate company GGP Inc.'s remaining shares would give it control over the U.S. firm's 'irreplaceable assets,' such as this retail space on Fifth Avenue in New York.

JOHN TAGGART/BLOOMBERG

If Brookfield Property Partners' proposal succeeds, GGP shareholders would own about one-third of the combined company.

BETH J. HARPAZ/ASSOCIATED PRESS


Huh? How did I get here?
Return to Main Leah_McLaren Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page