People walk by the Brookfield Place Pavilion in the pedestrian junction of the World Trade Center West Concourse in New York City.
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Brookfield Asset Management said on Monday it made an offer to take its Brookfield Property Partners commercial real estate arm private in a $ 5.9 billion deal.
The Canadian asset manager offers $ 16.50 for each share of Brookfield Property it does not already own.
“The privatization will give us greater flexibility in managing the portfolio and realizing the intrinsic value of BPY’s high-value assets,” Brookfield Asset Management CFO Nick Goodman said in a statement.
Brookfield Property has approximately $ 88 billion in assets, including office buildings, shopping centers, storage facilities and logistics hubs. The fallout from the Covid pandemic has caused the value of many of his properties to fall. Retail and office spaces are seen as particularly risky bets as job openings rise and more people adjust to shopping and working from home.
On the Nasdaq, Brookfield Property’s stock is down about 20% from a year ago. The stock rose more than 15% in Monday’s premarket trading, while Brookfield Asset Management’s stock remained unchanged.
In a separate press release, Brookfield Property said the board of directors has established an independent committee to review the proposal.
The $ 16.50 per unit price represents a premium of 14.9% and 14.0% respectively to the closing price of Brookfield Property shares on the Toronto Stock Exchange and Nasdaq as of December 31. Shareholders can choose to receive $ 16.50 in cash each. Brookfield Property unit, 0.40 Brookfield Class A shares, or 0.66 Brookfield Property preferred units with a liquidation preference of $ 25 per unit, Brookfield Asset Management said.
Brookfield Asset Management, which has approximately $ 575 billion in assets under management, does not propose to acquire other securities of Brookfield Property and its subsidiaries. They are expected to remain outstanding.