Brookfield Asset Management Inc., a Canada-based company dealing with the pivotal domain of asset management, is all set to acquire GGP Inc., a giant firm across the real estate investment sector, for USD 14 billion. According to the reliable sources, the former has offered USD 23 per share to the latter – a price that apparently represents a premium of nearly 21% to GGP Inc.’s closing share price as on November 6th, 2017. Earlier in the third quarter of this year, Brookfield had purchased 68 million shares of GGP, which were estimated at USD 462 million, thereby helping the former raise its ownership stake in GGP Inc. from 29% to 34%.
At the beginning of this month, Brookfield had already entered into talks with GGP about its acquisition stake. The company discussed a premium of nearly 10% to 15% over the share price of GGP during the starting week of November this year till both the firms reached a consensus on the offer of USD 23 per share to the GGP.
Authentic sources have quoted that in 2010, Toronto-based Brookfield Inc. had invested in the Chicago-based GGP Inc. as a part of the deal to bring the firm out of bankruptcy. The former purchased surplus warrants from GGP in 2013 and had signed on an agreement to not raise its stake above 45% over the coming four years. Sources state that Brookfield had delivered on its promise of not exceeding the limit of share ownership in the firm by owning less than 45% shares.
The buyout of GGP by Brookfield Asset Management, as per industry experts, falls among the realm of strategic moves that will lead to the reinvention of shopping tactics, given that the emergence of the e-commerce sector has led to a considerable decline in brick-and-mortar stores.