People walk through the Brookfield Place Pavilion at the World Trade Center West Concourse pedestrian connection in New York.
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Brookfield Asset Management said Monday it had made an offer to privately take over its commercial real estate Brookfield Property Partners in a $ 5.9 billion deal.
The Canadian asset management firm is offering $ 16.50 for every Brookfield Property stake it does not yet own.
“The privatization will enable us to have greater flexibility in managing the portfolio and to realize the intrinsic value of BPY’s high quality assets,” said Nick Goodman, CFO of Brookfield Asset Management, in a statement. .
Brookfield Property has about $ 88 billion in assets, including office buildings, shopping malls, self-storage facilities and logistics hubs. As a result of the aftermath of the Covid pandemic, the value of many of its properties declined. Retail and office space are especially considered risky bets, as vacancies increase and more people adapt to shop and work from home.
On the Nasdaq, Brookfield Property’s shares are about 20% lower than a year ago. The stock rose more than 15% in pre-trading on Monday, while Brookfield Asset Management’s shares remained unchanged.
In a separate press release, Brookfield Property said the board had set up an independent committee to review the proposal.
The price of $ 16.50 per unit represents a premium of 14.9% and 14.0% respectively on the closing price of Brookfield Property shares on the Toronto Stock Exchange and Nasdaq as of December 31st. Shareholders can choose to receive $ 16.50 cash for each Brookfield Property unit, 0.40 Brookfield A shares, or 0.66 of Brookfield Property Preference units with a $ 25 liquidation preference unit, Brookfield Asset Management said .
Brookfield Asset Management, which has approximately $ 575 billion in assets under management, suggests that it does not want to acquire other securities from Brookfield Property and its subsidiaries. It is expected to remain outstanding.