Brookfield reaches deal for Brookfield Property Partners with sweetened offer

Brookfield reaches deal for Brookfield Property Partners with sweetened offer Photo Credit: The Canadian Press

TORONTO — Brookfield Asset Management Inc. has raised its offer and reached a deal to buy the stake in Brookfield Property Partners LP that it does not already own for US$6.5 billion.

The alternative asset investment manager said Thursday the independent members of the Brookfield Property board have unanimously approved the offer of US$18.17 per Brookfield Property unit.

The bid is up from Brookfield’s earlier offer of US$16.50 per unit.

“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,” Nick Goodman, Brookfield Asset Management’s chief financial officer, said in a statement.

“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.” 

The deal is subject to approval by a majority of the public unitholders of Brookfield Property, in addition to other customary closing conditions.

Brookfield Property unitholders will have the option to receive their payment in cash, Brookfield class A shares or Brookfield Property preferred units with limits for each category.

The total cash available is capped at US$3.27 billion, while there are 59.3 million Brookfield shares available.

The deal is expected to close in the third quarter of 2021.

Brookfield Property Partners owns or operates a wide variety of properties including office buildings, shopping malls and other properties across the world.

Brookfield Asset Management teamed up with Simon Property Group to buy retailer JCPenney from bankruptcy last year.

This report by The Canadian Press was first published April 1, 2021.

Companies in this story: (TSX:BAM.A, TSX:BPY.UN)

The Canadian Press