- Brookfield Asset Management (BAM.A) is looking to take its commercial real estate arm, Brookfield Property Partners, off the public market
- The Canadian alternative asset manager has proposed to acquire all of the units it doesn’t already own in Brookfield Property at a price of US$16.50 (C$20.97) each, valuing the deal at roughly US$5.9 billion (C$7.5 billion)
- This purchase price represents a 14.9 per cent premium compared to Brookfield Property’s closing share price on December 31, 2020
- Once complete, the transaction is expected to provide greater flexibility in operating the property portfolio
- Shares in Brookfield Asset Management remained steady at the close of trading on December 31, 2020, at a price of C$52.62 each
Brookfield Asset Management (BAM.A) is looking to take its commercial real estate arm, Brookfield Property Partners, off the public market.
The Canadian firm, which has roughly US$575 billion (C$730.92 billion) in assets under management, offered this morning to purchase all of the units it doesn’t already own in Brookfield Property Partners for a price of US$16.50 (C$20.97) each, valuing the deal at around US$5.9 billion (C$7.5 billion).
This price represents a 14.9 per cent premium compared to Brookfield Property Partners’ closing price on the Toronto Stock Exchange on December 31, 2020.
According to the proposal, Brookfield Property Partners’ investors can either take the US$16.50 (C$20.97) cash payment for each unit, or alternatively choose 0.4 of Brookfield Asset Management’s stock or 0.66 of Brookfield Property Partners’ preferred units.
Investors of Class A stock in Brookfield’s other publicly-listed real estate entity, Brookfield Property REIT, will also be able to participate in the transaction once they have exchanged their shares for units in Brookfield Property Partners.
Nick Goodman, CFO of Brookfield Asset Management, said the deal presents an attractive opportunity for Brookfield Property Partners’ unit holders to either monetise their holding at a healthy premium, or continue to invest through Brookfield shares.
“The privatisation will allow us to have greater flexibility in operating the portfolio and realising the intrinsic value of [Brookfield Property Partners’] high-quality assets,” he added.
Brookfield Property Partners acknowledged the receipt of the proposal today, and said it has established a special committee of independent directors to review the offer.
With one of the largest real estate portfolios in the world, Brookfield Property Partners has approximately US$88 billion (C$111.86 billion) in total assets, which includes London’s Canary Wharf and Brookfield Place in New York.
In 2018, the company purchased GGP Inc. – the second-largest mall operator in the United States – for about US$15 billion (C$19.07 billion).
Shares in Brookfield Asset Management remained steady at the close of trading on December 31, 2020, at a price of C$52.62 each.
