Brookfield Property Partners (NASDAQ: BPY) announced Monday it finally reached a deal to buy mall operator General Growth Properties (NYSE: GGP) for $9.25 billion in cash.
Brookfield already owns roughly one third of GGP, which is one of the largest mall owners in the country behind Simon Property Group.
Late last year, GGP rejected a $14.8-billion cash-and-stock buyout offer (or $7.4 billion in cash) from Brookfield. The bid was deemed inadequate by an independent board at the time, and the two companies went back to the drawing table.
Earlier this month, Brookfield reportedly submitted a new offer to take over GGP, hoping to create one of the world's largest publicly traded property companies.
With the new proposal, GGP shareholders can choose to receive either $23.50 a share in cash, one Brookfield unit or shares of a new company. Brookfield plans to create a new real estate investment trust under the ticker "BPR," which will qualify as a REIT for tax purposes and issue shares in this transaction.
Like its peers in the industry, GGP has been increasingly pressured by investors as retailers shutter stores in malls and landlords are forced to act quickly, filling the gaps.
GGP CEO Sandeep Mathrani said on a recent earnings conference call that the Chicago-based REIT had been trimming its exposure to apparel retailers, adding more food and entertainment options, and dividing up boxes once anchored by department stores to bring in tenants such as TJ Maxx and Dick's Sporting Goods.
Shares in BPY faded 59 cents, or 3%, to $18.80, while GGP shares dropped 66 cents, or 3.1%, to $20.55
