People walk through the Brookfield Place Pavilion at the pedestrian transit connection of the World Trade Center West Concourse in New York City.
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Brookfield Asset Management said on Monday that it had made an offer to make its commercial real estate arm Brookfield Property Partners private in a $ 5.9 billion deal.
The Canadian asset management company is offering $ 16.50 for each share of Brookfield Property that it does not yet own.
“Privatization will allow us to have greater flexibility to operate the portfolio and realize the intrinsic value of BPY’s high quality assets,” said Brookfield Asset Management CFO Nick Goodman in a statement.
Brookfield Property has approximately $ 88 billion in assets, including office buildings, shopping malls, its own storage facilities and logistics centers. Due to the effects of the Covid pandemic, the value of many of its properties has fallen. Retail and office spaces are seen as especially risky bets, as vacancies increase and more people are adapting to shopping and working at home.
At Nasdaq, Brookfield Property’s shares fell about 20% from the previous year. Shares rose more than 15% in pre-market trading on Monday, while Brookfield Asset Management’s shares remained unchanged.
In a separate press release, Brookfield Property said its board has established an independent committee to review the proposal.
The unit price of $ 16.50 represents a premium of 14.9% and 14.0%, respectively, at the closing price of Brookfield Property’s shares on the Toronto Stock Exchange and Nasdaq as of December 31. Shareholders may choose to receive $ 16.50 in cash for each Brookfield Property Unit, 0.40 Brookfield Class A shares or 0.66 Brookfield Property 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 intend to acquire other securities from Brookfield Property and its subsidiaries. They are expected to remain pending.