Brookfield offers to take Brookfield Property private in $5.9bn deal

Brookfield offers to acquire Brookfield Property private in $5.9bn deal

Brookfield Asset Management Inc.(Brookfield) and institutional partners have made an offer to acquire all of the limited partnership units of Brookfield Property Partners L.P.(BPY) that it does not already own at a value of $16.50 per BPY unit, or $5.9 billion in total value.

BPY unitholders would have the ability to elect to receive, per BPY unit, $16.50 in cash, 0.40 Brookfield Class A shares, or 0.66 of BPY preferred units with a liquidation preference of $25.00 per unit. 

The Canadian alternative asset manager said the $16.50 per unit price represents a premium of 14.9% and 14.0%, respectively, to the closing price of the BPY units on the TSX and Nasdaq on December 31, 2020.

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”This price also represents a premium of 8.9% and 29.4%, respectively, to the 30-day and 180-day volume-weighted average price of the BPY units on the Nasdaq,” the company said in a statement.

“The offer presents an excellent opportunity for BPY unitholders to either monetize their units in cash at a premium to recent trading prices, continue to invest with us in the upside of the portfolio via Brookfield shares, or select BPY preferred units designed for income-oriented investors who would like to maintain similar dividend income which they receive from BPY today in a preferred instrument, based on what is best for them,” said Nick Goodman, CFO of Brookfield Asset Management.

“The privatization will allow us to have greater flexibility in operating the portfolio and realizing the intrinsic value of BPY’s high-quality assets,” he added.

Brookfield Property Partners, through Brookfield Property Partners L.P. and its subsidiary Brookfield Property REIT Inc., is one of the world’s premier real estate companies, with approximately $88 billion in total assets.

Brookfield said it is not proposing to acquire other securities of BPY and its subsidiaries, which are expected to remain outstanding.

All dollar references are in U.S. dollars.