Brookfield gets deal for full control of U.S. mall operator after raising bid

TORONTO – The Brookfield group of companies has reached a friendly deal to take over Rouse Properties, a New York-based company that operates regional malls and retail centres in 21 states.

Including US$1.7 billion of debt that Brookfield will assume, the offer values Rouse at US$2.8 billion.

Rouse shareholders — other than those in the Brookfield group — are being offered US$18.25 per share in cash or about US$690 million in total from a private fund managed by Toronto-based Brookfield Asset Management Inc. (TSX:BAM.A)

Brookfield Property Partners (TSX:BPY.UN) — another entity controlled by BAM — will continue to own or control 33 per cent of Rouse’s equity, which is valued at US$1.06 billion in total.

Brookfield Property Partners and the Rouse board support the new Brookfield bid.

Brookfield Asset Management had offered US$17 per share on Jan. 16. The revised bid is 2.8 per cent above Wednesday’s closing price and 35 per cent above Rouse’s stock price prior to the initial bid.

Since the first offer, Rouse’s publicly traded shares (NYSE:RSE) had risen to US$17.75 at the end of trading on Wednesday, from US$13.49 at the end of trading on Jan. 15.

Brookfield Asset Management owns a 62 per cent stake in Brookfield Property Partners.