GGP rejects Brookfield’s $15B buyout offer

General Growth Properties rejected the $14.8 billion buyout offer from Brookfield Property Partners, which is now considering making a new bid.

The move is not exactly a surprise, as industry experts considered the $23-per-share offer Brookfield made last month to be a lowball bid, and expected the company to make a second and final offer, Reuters reported.

Brookfield offered cash and stock to buy the 66 percent of GGP that it does not already own. Negotiations are expected to continue between the two companies, though they don’t plan to make a new announcement unless the talks lead to a deal or fall off the table, sources told Reuters.

If the deal goes through, it would create a company with an interest in roughly $100 billion worth of real estate assets around the world and a net operating income of about $5 billion, according to Brookfield.

GGP shares on Friday ended trading at $23.43, for a market capitalization of $22.2 billion. Like many other real estate investment trusts, its shares have underperformed compared to the value of its real estate assets, and the company has faced challenges specific to the retail sector such as exposure to troubled companies like Sears Holdings Corp.

Experts speculate that Brookfield would look to leverage its expertise in multifamily and office development to reposition struggling shopping centers into live-work-play properties. [Reuters] – Rich Bockmann