The Real Deal New York

Rouse agrees to Brookfield takeover bid

Asset manager buying out mall REIT at $18.25 per share in deal valued at $2.8B

February 25, 2016 11:30AM

Brookfield Rouse

Brookfield Place in Battery Park City (credit: Pelli Clarke Pelli) (inset: Andrew Silberfein)

Mall landlord Rouse Properties has accepted Brookfield Asset Management’s private takeover of the publicly traded real estate investment trust for $18.25 per share, which values the deal at about $2.8 billion, including debt.

A special committee of Rouse’s board of directors unanimously approved Brookfield’s all-cash proposal, the Bryant Park-based retail REIT announced Thursday, with the company entering into a definitive agreement to be acquired by the Toronto-based asset manager.

Brookfield will acquire all outstanding shares of Rouse common stock that it does not already own at a price of $18.25 per share – an improvement on Brookfield’s original proposal of $17 per share put forth last month. Brookfield is already Rouse’s largest shareholder, holding around one-third of the company’s common stock.

The purchase represents a roughly 35 percent premium on Rouse’s closing stock price as of Jan. 15, the day before Brookfield lodged its initial, unsolicited offer for the REIT.

While the deal is valued at around $2.8 billion, when factoring in Rouse’s $1.64 billion in indebtedness, the $18.25 per share officer values the retail landlord at $1.06 billion, according to Reuters. The transaction is slated for completion in the third quarter of this year pending the approval of Rouse shareholders.

Brookfield has roughly $225 billion under management globally, while Rouse – which was spun off from fellow retail REIT General Growth Properties in 2012 – owns a portfolio of 35 malls and retail centers across the U.S. – Rey Mashayekhi

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