Brookfield Makes $657 Million Offer to Buy Rouse Properties

  • Acquirer already owns about a third of U.S. mall landlord
  • Bid for $17 a share is 26% more than Friday's closing price

Brookfield Asset Management Inc., Canada’s largest alternative asset manager, made an unsolicited offer to acquire U.S. shopping-mall owner Rouse Properties Inc. for about $657 million.

Brookfield, which already owns about a third of Rouse, said it would pay $17 a share for the remainder in an all-cash transaction, according to a statement Tuesday. The offer is 26 percent more than Rouse’s closing price on Friday. The real estate investment trust’s shares jumped 30 percent, the most on record, to close at $17.50.

Rouse was spun off in 2012 off from mall owner General Growth Properties Inc., after General Growth emerged from bankruptcy with financing from an investor group led by Brookfield. The Rouse spinoff contained 30 retail properties in smaller cities and second-tier properties in larger markets. Shares of New York-based Rouse had fallen about 32 percent in the 12 months through Friday.

“Our offer provides an attractive opportunity for Rouse shareholders to realize a significant premium to recent public-market pricing,” said Brian Kingston, chief executive officer of Brookfield’s publicly traded real estate arm, Brookfield Property Partners LP.

Special Committee

As part of the purchase, Brookfield Property Partners would retain the Rouse shares that it currently owns, according to the statement. The transaction values Rouse at about $986 million.

Rouse, in its own statement, said it received Brookfield’s unsolicited proposal on Saturday and established a special committee to review it and explore alternatives.

Brookfield has been bolstering its property holdings with purchases including the $2.5 billion acquisition last year of U.S. apartment landlord Associated Estates Realty Corp.

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