People walk down the Brookfield Place Pavilion, on the pedestrian traffic connection of the World Trade Center West Concourse in New York City.
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Brookfield Asset Management said Monday it made an offer to deprive its commercial real estate Brookfield Property Partners of a $ 5.9 billion deal.
The Canadian asset management firm is offering $ 16.50 for each Brookfield Property share it does not yet own.
“Privatization will allow us to have greater flexibility in the operation of the portfolio and in realizing the intrinsic value of BPY’s high-quality assets,” Nick Goodman, chief financial officer of Brookfield Asset Management, said in a statement.
Brookfield Property has about $ 88 billion in assets, including office buildings, shopping malls, storage facilities and logistics centers. Due to the effects of the Covid pandemic, the value of many of its properties has fallen. Commercial and office spaces are considered especially risky bets as vacancies increase and more people are adapting to shopping and working from home.
On the Nasdaq, Brookfield Property shares have fallen about 20% from a year ago. Shares soared more than 15% in pre-market trading on Monday, while Brookfield Asset Management shares remained unchanged.
In a separate press release, Brookfield Property said its board has set up an independent committee to review the proposal.
The $ 16.50 per unit price represents a premium of 14.9% and 14.0%, respectively, at the closing price of Brookfield Property shares on the Toronto Stock Exchange and the Nasdaq as of December 31 . Shareholders will be eligible to receive $ 16.50 in cash for each Brookfield Property unit, 0.40 Brookfield Class A shares, or 0.66 of Brookfield Property’s preferred units with a settlement preference of $ 25 per unit, said Brookfield Asset Management.
Brookfield Asset Management, which has about $ 575 billion in assets under management, said it does not propose to acquire other securities from Brookfield Property and its subsidiaries. They are expected to be exceptional.