Brookfield Asset Management Inc. (Brookfield) said Thursday it has reached an agreement 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 $18.17 per unit, or $6.5 billion in total value.
Brookfield said the $18.17 per unit represents an increase of 10%, including the appreciation in Brookfield Class A Shares, over the non-binding proposal made by Brookfield on January 4, 2021, a 26% premium to the undisturbed BPY unit price on December 31, 2020, and a 6% premium to the volume-weighted average price of BPY units on the Nasdaq since the announcement made January 4, 2021.
The independent members of the BPY Board of directors have unanimously approved the transaction, said the companies in a joint statement.
“We are pleased to have reached agreement with BPY’s independent directors on a transaction we believe is appealing to BPY unitholders in many aspects and allows for greater optionality in how we manage our portfolio of high-quality real estate assets. Not only can unitholders choose to receive a meaningful portion of their consideration in cash at a significant premium, but they will also have the option to remain invested in the future upside of our real estate business and alternative asset management franchise,” said Nick Goodman, CFO of Brookfield Asset Management.
”The transactions are subject to approval by a majority of the public unitholders of BPY, in addition to other customary closing conditions including the approval of the Ontario Superior Court of Justice. Assuming these conditions are met, the Arrangement is expected to close in the third quarter of 2021,” said the companies in a statement.
Under the terms of the agreement, Brookfield Property Partners unitholders will have the ability to elect to receive, per unit, $18.17 in cash, 0.3979 of a Brookfield class A share, or 0.7268 of a Brookfield Property Partners preferred unit with a liquidation preference of $25.00 per unit, subject to pro-ration. The maximum cash amount is 50%.