Ryan Thomas, attorney at Bass, Berry & Sims, is extensively quoted regarding an offer by Indianapolis-based Simon Property Group to acquire Chicago-based General Growth Properties, thus merging the top two retail-focused real estate companies in the country. The article by reporter Katie Hinderer, titled “Simon Faces Uphill Battle with Shareholders,” appears in the February 17, 2010 online edition of GlobeSt.com.
From the article:
However, this is not a done deal, according to Ryan Thomas, a partner at Bass Berry & Sims PLC and expert in mergers and acquisitions of public and private companies. Since GGP is still trying to pull a number of assets out of bankruptcy, Simon will need court approval; as well as the approval of secured creditors and shareholders.
The creditors may be the easiest challenge. “The court will balance the interests of all creditors, including the secured creditors, and will consider the feasibility of the Simon transaction,” Thomas tells GlobeSt.com. “The secured creditors may support the transaction, unless they see an alternate path that enhances their collateral — or unless the Simon transaction somehow impairs their collateral.”
“The shareholders and the board will likely be a challenge for Simon, especially given the apparent cold shoulder to date,” Thomas says. “One of General Growth’s largest equity holders, (Pershing Square) who happens to be an activist investor, has recently indicated that the company is vastly undervalued — placing its valuation significantly higher than the offer by Simon. It is also telling that the board has apparently not engaged in negotiations with Simon, presumably reflecting either a more optimistic view of the residual value of the equity or confidence in a better alternative plan.”