General Growth Looking for Public Market Funds

General Growth Properties (Chicago), which earlier this week received a takeover bid from rival Simon Property Group (Indianapolis), says it wants to raise funds from public markets to fuel an independent exit from bankruptcy, reports Reuters.

Simon has offered $10 billion for the company, although the two mall property operators have yet to engage in any formal discussions. Still, Simon has been publicly pressuring General Growth to begin talks, while the bankrupt company looks to pursue an exit process on its own terms.

Reuters reports that General Growth presented Simon Property with a nondisclosure agreement in December, but that the mall operator did not sign it. In addition to the public funds, General Growth’s efforts to remain a free-standing company have included talks with investors and discussions with companies, such as Brookfield Asset Management, about financing the company without acquiring it.

“What they want to accomplish is a capital raise, an equity raise that's large enough to shore up the balance sheet for an extended period,” Jim Sullivan, managing director at Green Street Advisors, told Reuters. “It's a couple of billion dollars combined with a good chunk of the unsecured converting to equity.”

General Growth filed for bankruptcy last April and has until late February to come up with a reorganization plan. The company recently asked the U.S. bankruptcy court to extend that period by six months.

If Simon’s bid is successful, the company would control roughly 40 percent of the U.S. regional mall market.

General Growth operates such properties as Fashion Show (Las Vegas), South Street Seaport (New York), Ala Moana Center (Hawaii) and Faneuil Hall Marketplace (Boston).  Simon owns or has an interest in more than 300 properties in North America, Europe and Asia, including Roosevelt Field (Long Island, N.Y.) and Sawgrass Mills Circle (Fort Lauderdale, Fla.).