GGP: Updates (mostly Simon’s moves)
Here are some quick updates on GGP:
– Gap recently got hit with Federal Trade Commission (FTC) questions about Simon’s recent agreement to purchase Prime Outlets. Prime Outlets has 22 retail outlet centers. The implication for GGP is if FTC is getting worried about acquisition of 22 outlet centers, Simon’s purchase of GGP will bring many roadblock from FTC.We still think Simon can likely work out some deal structure to still successfully acquire the GGP assets.
– Recently there have been some rumors about Westfield and Simon putting a combined offer together. These are rumors and nothing formally has been announced. The rumors at that the offer will be $15/share and Simon and Westfield will split the GGP assets. I think we should see some updates on this in the coming week.
We have mentioned earlier that we expect multiple rounds of bidding before it is clear who the winner will be. Simon will not walk away from acquiring GGP’s assets. The Ackman/Brookfield team will do their job in increasing shareholder value by countering the low bids until something worthwhile is announced. We don’t know who will end up w/ the GGP assets, but the current price of $15/share the from BAM/GGP offer is clearly a step in increasing the bidding wars. Current GGP shareholders will be paid handsomely for waiting a few weeks/months until the bidding war ends.