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Brookfield Makes Unsolicited Bid for Rouse Properties

Offer Values Regional Mall Owner at $1 Billion; Rouse Hires Advisors to Evaluate Proposal
January 19, 2016
Brookfield Asset Management Inc. this past weekend made an unsolicited nonbinding offer to acquire Rouse Properties Inc. outright.

Brookfield’s purchase is being made on behalf of a real estate fund it manages. The offer is to acquire all the outstanding shares of Rouse, other than those it currently controls. Brookfield and its affiliates already own about 33% of Rouse's outstanding common stock.

Brookfield is offering $17 per share in cash to acquire the company. Rouse’s shares ended last week at $13.12 per share, giving the REIT a total market cap of about $783 million. Brookfield’s offer would raise that valuation to more than $1 billion.

The proposed price represents a premium of 26% to the closing price and a 19% premium to the 30-day volume-weighted average trading price of Rouse shares.

“Our offer provides an attractive opportunity for Rouse shareholders to realize a significant premium to recent public market pricing,” said Brian Kingston, CEO of Brookfield Property Group.

Rouse Properties is among the U.S.'s largest publicly traded regional mall owners. The REIT’s portfolio includes 35 malls and retail centers in 21 states encompassing approximately 24.1 million square feet.

Brookfield said its offer is not subject to any financing contingencies or additional due diligence.

Rouse has appointed a special committee to evaluate the proposal from Brookfield as well as any other offers that may come in as a result of the Brookfield offer. That committee has selected Sidley Austin LLP as its independent legal counsel and BofA Merrill Lynch as its independent financial advisor to assist in the process.

Rouse Properties was created in 2012 when another major mall owner, General Growth Properties, spunoff 30 retail properties into a separate publicly traded company to its shareholders. GGP had previously acquired The Rouse Co. in a $11.3 billion acquisition in 2004.

Chicago-based GGP divested the malls into the separate publicly traded REIT in order to concentrate on malls it said had higher rents and tenant sales, and to reduce debt.

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