General Growth Properties wins approval of bankruptcy plan, ending rival’s takeover bid
General Growth Properties Inc., the struggling owner of the Glendale Galleria and other large Southland shopping centers, won court approval Friday for a plan to sell the company that puts a group led by Canadian real estate investor Brookfield Asset Management Inc. at the front of the line.
The decision by a federal Bankruptcy Court judge in New York ended a hard-fought campaign by rival mall operator Simon Group Inc. to take over General Growth. Simon is the largest mall operator in the U.S., and a merger with General Growth would have created a juggernaut so powerful it would have been able to set mall rents in much of the country, industry observers said.
General Growth, which owns more than 200 malls in 44 states including Northridge Fashion Center and Fallbrook Center in West Hills, had resisted Simon’s persistent embrace for the last three months. On Thursday, Simon made what it called its “best and final” offer of $6.5 billion for General Growth.
Simon withdrew the bid Friday after it was rejected by General Growth’s board of directors.
Among Simon’s Southern California malls are the Del Amo Fashion Center in Torrance, the Brea Mall in Brea and Ontario Mills in Ontario.
The court supported General Growth’s proposal to accept financing from Brookfield, Fairholme Capital Management and Pershing Square Capital Management in exchange for warrants to buy stock in the company after it is reorganized under Chapter 11 of the U.S. Bankruptcy Code.
Brookfield’s proposal is worth about $7 billion in equity. Shares of General Growth fell $1.77 on Friday to $14.07. Brookfield shares rose 95 cents to $24.76.
