We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GGP Inc.’s shares rallied 3.3% after market close on Monday, as details of the revised deal pertaining to its acquisition by Brookfield Property Partners unfolded. Amid the dull retail real estate market, this rally offers respite to investors.
Notably, both companies have entered into a definitive agreement, per which Brookfield will acquire the GGP shares it doesn’t own yet for nearly $15.3 billion, gaining complete ownership of the second-largest U.S. mall owner.
In November 2017, GGP rejected a $14.8 billion cash-and-stock acquisition offer made by Brookfield, and both the companies continued negotiating the takeover deal. Earlier this month, the asset manager revised its buyout offer, increasing the aggregate cash consideration from $7.4 billion to $9.25 billion.
Brookfield intends to create a new real estate investment trust (REIT) under the ticker “BPR” and issue its shares in this transaction. The newly formed entity will become one of the largest commercial real estate enterprises in the world with assets worth nearly $90 million and annual net operating income of more than $4 billion.
Transaction Details
According to the agreed proposal, GGP shareholders can choose to receive either $23.5 in cash or one BPY unit or one share of BPR. This is subject to proration based on an aggregate cash consideration of $9.25 billion.
In addition, GGP shareholders will receive dividends for second-quarter 2018 up to 22 cents per share. Further, the transaction is contingent upon the approval of GGP shareholders representing at least two-thirds of GGP’s outstanding common stock as well as a majority of its shares not owned by Brookfield and its affiliates.
Moreover, the deal is subject to other customary closing conditions and it anticipated to close in third-quarter 2018.
Brookfield Asset Management (BAM - Free Report) will guarantee BPR’s shareholder rights to exchange their shares for a BPY unit or cash equivalent of a BPY unit. Further, Brookfield intends to fund the cash consideration through $4 billion of financing from joint venture equity partners as well as a syndicate of lenders.
Our Viewpoint
With higher cash consideration, the acquisition also offers GGP shareholders the ability to receive shares in a newly listed REIT and hence enjoy upside potential. In fact, after the transaction is completed, GGP shareholders will own nearly 26% of the new REIT.
While GGP is struggling to draw decent mall traffic amid a rapid shift in customers’ shopping preferences and patterns with online purchases growing by leaps and bound, such transactions appease investors by providing a premium value for their shares.
Additionally, after this buyout, Brookfield will have higher negotiating power with retailers, which will aid the company to revamp and draw more value to some GGP-owned malls.
Shares of GGP have outperformed its industry in the past six months. During this time, the stock has lost 0.3% compared with industry’s decline of 9.8%.
A better-ranked stock in the same space is Arbor Realty Trust (ABR - Free Report) . It carries a Zacks Rank of 2 (Buy). Also, the Zacks Consensus Estimate for 2018 FFO per share has been revised 2.3% upward to 90 cents over the past month. Its share price has risen 7.9% in six months’ time.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
GGP Accepts Brookfield's Revised Buyout Offer, Stock Gains
GGP Inc.’s shares rallied 3.3% after market close on Monday, as details of the revised deal pertaining to its acquisition by Brookfield Property Partners unfolded. Amid the dull retail real estate market, this rally offers respite to investors.
Notably, both companies have entered into a definitive agreement, per which Brookfield will acquire the GGP shares it doesn’t own yet for nearly $15.3 billion, gaining complete ownership of the second-largest U.S. mall owner.
In November 2017, GGP rejected a $14.8 billion cash-and-stock acquisition offer made by Brookfield, and both the companies continued negotiating the takeover deal. Earlier this month, the asset manager revised its buyout offer, increasing the aggregate cash consideration from $7.4 billion to $9.25 billion.
Brookfield intends to create a new real estate investment trust (REIT) under the ticker “BPR” and issue its shares in this transaction. The newly formed entity will become one of the largest commercial real estate enterprises in the world with assets worth nearly $90 million and annual net operating income of more than $4 billion.
Transaction Details
According to the agreed proposal, GGP shareholders can choose to receive either $23.5 in cash or one BPY unit or one share of BPR. This is subject to proration based on an aggregate cash consideration of $9.25 billion.
In addition, GGP shareholders will receive dividends for second-quarter 2018 up to 22 cents per share. Further, the transaction is contingent upon the approval of GGP shareholders representing at least two-thirds of GGP’s outstanding common stock as well as a majority of its shares not owned by Brookfield and its affiliates.
Moreover, the deal is subject to other customary closing conditions and it anticipated to close in third-quarter 2018.
Brookfield Asset Management (BAM - Free Report) will guarantee BPR’s shareholder rights to exchange their shares for a BPY unit or cash equivalent of a BPY unit. Further, Brookfield intends to fund the cash consideration through $4 billion of financing from joint venture equity partners as well as a syndicate of lenders.
Our Viewpoint
With higher cash consideration, the acquisition also offers GGP shareholders the ability to receive shares in a newly listed REIT and hence enjoy upside potential. In fact, after the transaction is completed, GGP shareholders will own nearly 26% of the new REIT.
While GGP is struggling to draw decent mall traffic amid a rapid shift in customers’ shopping preferences and patterns with online purchases growing by leaps and bound, such transactions appease investors by providing a premium value for their shares.
Additionally, after this buyout, Brookfield will have higher negotiating power with retailers, which will aid the company to revamp and draw more value to some GGP-owned malls.
Shares of GGP have outperformed its industry in the past six months. During this time, the stock has lost 0.3% compared with industry’s decline of 9.8%.
Zacks Rank and Stock to Consider
GGP currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the same space is Arbor Realty Trust (ABR - Free Report) . It carries a Zacks Rank of 2 (Buy). Also, the Zacks Consensus Estimate for 2018 FFO per share has been revised 2.3% upward to 90 cents over the past month. Its share price has risen 7.9% in six months’ time.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>