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Indianapolis-based Simon Property Group Inc., the nation's largest real estate investment trust, has made public its offer to acquire General Growth Properties Inc. (GGP) in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash.

The company posted on its Web site the text of its Feb. 8, 2010, offer letter to GGP, as well as a letter Simon sent Tuesday to General Growth.

Simon's offer would provide a 100% cash recovery of par value, plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility and others, Simon says. This consideration to creditors totals approximately $7 billion.

“We have not received a substantive response to this offer from GGP or its advisors, nor any indication that you are prepared to enter into serious discussions so as to make our offer available to your shareholders and creditors,” David Simon, Simon’s chairman and CEO, wrote to GGP’s board of directors Feb. 15. “Accordingly, we are today making our offer public.”

According to Simon’s company statement, the official committee of GGP’s unsecured creditors has advised Simon that it supports the Simon offer, and encourages GGP to engage with Simon promptly to allow the proposed transaction to be considered by GGP’s creditors and shareholders as soon as possible.

"Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result,” says Michael Stamer, counsel for the creditors’ committee.

SOURCE: Simon Property Group Inc.


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