I had initially thought about providing updates on GGP on a daily basis. Although with the way things are moving, what happens in the morning seems like old news by the end of the day. Here are the recent updates:
– Bruce Berkowitz, of Fairholme Capital, recently announced his interest in helping GGP come out of the Chp 11 as an independent company. Fairholme own over $500M of GGP debt and has mentioned that he is interested in helping GGP “emerge from bankruptcy as healthy as possible without a takeover and with the ultimate conversion of Fairholme’s stake into equity.” This will create a big dent in Simon’s takeover plans.
– Brookfield Asset Management has been rumored for a while to be interested in a JV with GGP. BAM recently amended its shelf offering, now offering $2B instead of $1B. Recently GGP mentioned they were looking to raise $1-2B to pay off the unsecured creditors. This is definitely an option for raising capital.
– Simon started the initial bidding war with its $10B offer. There has been lots of talk about David Simon’s public outcry over GGP rejecting Simon’s offer. It would be foolish to rule out David Simon in any takeover bid. Recently the rumor has it that Blackrock is joining Simon in Simon’s takeover bid. Even with the debt rating warning by S&P, Simon is not out of the running. It would be a mistake to rule them out.
The great news for equity holders is the bidding from these firms will only increase the equity value. GGP’s management has the right incentives to increase equity value and to get it done quickly. With the recent rumors and activities, equity holders will not have to wait too long to for this process to complete.
If last week was a sign, the coming week will be extremely interesting.