Indiana-based Simon Property Group Inc. has hired investment adviser Lazard Ltd. and law firm Wachtell, Lipton, Rosen & Katz to develop a strategy for a potential bid for at least part of its chief rival, Chicago-based General Growth Properties Inc., according to a report in the Wall Street Journal.
General Growth, which operates Manchester’s Buckland Hills mall, has been attempting to emerge from Chapter 11 bankruptcy status since April. General Growth officials have signaled that they hope to be out of bankruptcy court by as early as February, according to the report.
Chapter 11 status permits a financially struggling company to continue its daily business while formulating a plan to return to profitability, or failing that, to liquidate.
While Simon hasn’t disclosed whether it will make a General Growth bid, Simon Chairman and CEO David Simon has said he will study General Growth as an acquisition target, according to the report. Simon has about $4 billion available for acquisitions through the sale of new stock and bonds, the report adds.
In addition to Simon’s interest in a General Growth acquisition, Westfield Group — the Australian mall owner that formerly operated Enfield Square mall — also has $6.8 billion in cash and other assets set aside and “is monitoring General Growth’s bankruptcy but hasn’t hired advisers to study it,” according to the report. Westfield sold Enfield Square in 2006 to rival Australian mall operator Centro Properties Group.
Westfield and General Growth officials declined to comment about acquisition plans for the report, and a Simon official would confirm only that the company has hired the advisers.
In July, speculation about some sort of acquisition of General Growth also grew when the top executive of Centro Properties was seated as a member of General Growth’s board of directors. Neither side would say what the long-range implications might be — whether prospects have been heightened for some sort of asset exchange, purchase, or outright merger.
At the time that Centro CEO Glenn J. Rufrano was elected to the board, General Growth CEO Adam Metz said only that Rufrano’s experience will be helpful in General Growth’s efforts to make its way through bankruptcy court.
