Rouse Properties Inc. has agreed to be acquired by an affiliate of Brookfield Asset Management Inc. for $2.8 billion including Rouse’s debt.
At $18.25 per share, the all-cash transaction bests Brookfield’s original offer of about $2.54 billion made early last month and represents a premium of approximately 35% over Rouse’s closing stock price on January 15, 2016, the last trading day prior to Brookfield’s announcement of a proposal to acquire Rouse.
Under the terms of the agreement, Brookfield will acquire all of the outstanding shares of Rouse’s common stock, other than those shares currently held by Brookfield Property Partners LP.
"The Rouse team has built a great company with a strong platform and differentiated assets,” said David Kruth, chairman of the Special Committee of the board of Rouse, which unanimously approved the deal. “After careful consideration, the Special Committee determined that Brookfield’s increased proposal provides shareholders with compelling value as well as a high degree of execution certainty."
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.
It was formed when Chicago-based General Growth Properties Inc. (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. That move came several years after GGP bought developer Rouse Co. in 2004 for $11.3 billion.
Brookfield owns and manages interests in 174 retail assets, predominantly in the U.S. These properties encompass approximately 155 million square feet of retail space.
Brookfield has a 33% fully-diluted interest in GGP, the second-largest mall owner in the U.S. after Simon Property, and a 34% interest in Rouse Properties.
In late January, reports surfaced that Brookfield Asset Management could also be looking into acquiring the remaining outstanding shares of GGP.
BofA Merrill Lynch is acting as financial advisor and Sidley Austin LLP is acting as legal counsel to the Special Committee of Rouse Properties.