Canadian company Brookfield Asset Management is voluntarily offering an all-cash, $657 million bid for the majority stake of U.S. based mall owner Rouse Properties.
The Toronto-based company already owns about one-third of Rouse's stock. Brookfield is offering $17 per share for Rouse's remaining outstanding stock, and the deal is said to leave the retail landlord with a value of almost $1 billion, according to The Real Deal.
The bid of $17-per-share is a 26 percent premium on Rouse's Friday closing price, with Brookfield's total offer of $657 million based on Rouse's outstanding shares at $58 million.
Rouse shares increased 28 percent following the news of Brookfield's bid. The mall operator said that a special committee of company directors will review the offer right away.
General Growth Properties Inc., a mall owner, had Rouse as spinoff in 2012 after an investor group led by Brookfield financed the mall owner to rise from bankruptcy. Rouse spinoff has 30 retail properties in smaller cities and second-tier properties in bigger markets. New York-based Rouse's shares have gone down around 23 percent in the 12 months, according to The Globe and Mail.
"Our offer provides an attractive opportunity for Rouse shareholders to realize a significant premium to recent public-market pricing," said Brian Kingston, chief executive officer for publicly traded real estate arm, Brookfield Property Partners LP.
Brookfield Properties would absorb the Rouse shares that it presently owns, based on the statement. The deal values Rouse at about $986 million.
Brookfield has around $225 billion under management around the world, including through subsidiary Brookfield Property Partners. It has been strengthening its property holdings with purchases that include a $2.5 billion acquisition of the country's apartment landlord, the Associated Estates Realty Corp., last year.
On the other hand, Rouse, a real estate investment trust, owns a portfolio of 35 malls and retail centers across the country.
