So, has David Simon lost all credibility with anyone else or just me?
Let’s just start with GGP CEO Adam Metz’s reply to David Simon’s tantrum yesterday. It is beautiful in its simplistic yet direct way of saying “go f%&k yourself”……..but not in those precise words…
February 18, 2010
Mr. David Simon, Chairman of the Board and
Chief Executive Officer
Simon Property Group, Inc.
225 West Washington Street
Indianapolis, IN 46204Dear David:
Reference is made to your letter dated February 17. As we have previously stated, our objective is to maximize value for the company and its stakeholders and we are engaging in a process that is intended to accomplish that result in an expeditious manner. Understandably, your objectives are not aligned with ours. We hope you will, nonetheless, participate in our process.Sincerely,
Adam Metz
Chief Executive OfficerGeneral Growth Properties, Inc.
He’s right. Metz’s jobs is to get the highest price for GGP shareholders. Simon’s? To pay the lowest price for his shareholders. For David Simon’s to portray the altruistic intentions of saving GGP shareholders as he did in his letter yesterday is insulting for anyone who went past Business Management 100 in Community College.
I mean, really, can we just stop with the barrage of verbiage and get to the point? Also, would it be possible for anything you say in a letter to hold true for more than 48 hours Mr. Simon?
After yesterday saying he had a “fully funded” offer and was ready to go, we got word this am that S&P was putting Simon on “credit watch” for a downgrade should they complete the deal as they will then have too much debt. Readers here know that as we have been saying it since last year. To our surprise (please note sarcasm) we get this tonight from Bloomberg:
Blackstone Group LP (BX), the world’s largest private-equity firm, may join Simon Property Group Inc.’s bid to buy bankrupt General Growth Properties Inc., according to two people with knowledge of the discussions.
Blackstone is in talks with Simon, the biggest U.S. mall owner, said the people, who declined to be identified because the negotiations are private.
Simon offered more than $10 billion to buy General Growth out of bankruptcy in a bid it made public Feb. 16. General Growth Chief Executive Officer Adam Metz said the offer was too low and that Simon’s goals are “not aligned” with those of his Chicago-based company.
“Blackstone has a lot of capital to put to work and large investors feel there may be more opportunity at the entity-level as opposed to competing for individual properties,’’ Dan Fasulo, managing director of research firm Real Capital Analytics Inc. in New York, said in an interview. “This is a unique portfolio and there will be other interested parties.’’
Blackstone, based in New York, managed more than $23 billion in real estate assets as of Sept. 30. Its real estate funds had more than $12 billion of equity to invest as of June 30, according to the firm’s Web site.
General Growth filed for Chapter 11 protection in the biggest real estate bankruptcy in U.S. history in April after amassing $27 billion in debt making acquisitions. The mall owner may raise $1 billion to $2 billion from public markets to fund its exit from bankruptcy, Reuters reported today, citing a person familiar with the situation that it didn’t identify.
Ignore what people say, and watch what they do. Everything David Simon says is simply for public posturing, period. His actions say he is preparing a higher bid for GPP, has no plans of walking away and is prepared to do just about anything to get it including paying much more that already offered. Now, it is true that all of these contradict his public statements, but, if he is pulling out, why is he even talking to Blackstone and others and seeking their assistance? Why?
Now, I would expect him to back out publicly in an attempt to drive the stock price down yet continue to work behind the scenes to put a better bid together ahead of the Brookfield Boys (BAM & BPO), who are playing this perfectly. They are sitting back watch Simon flail around like a fish on a dock while they continue working with GGP management.
What all of this does prove is something we have said here for almost a year now, these are Prime assets that have a lot of interested parties. As we get closer to the end game, they are predictably coming out of the wood work. There more the merrier, more bidders mean higher prices….
Until I tell you different, my opinion is the Brookfield Boys have the inside track…..I feel they are going to come out of no where (meaning without warning or press leak) with an offer that makes David Simon go apoplectic.
Yes, I am still holding…..
Also, will be on a plane home to Logan tomorrow from 10:30 -1:45 …. if there is any news, call Jet Blue and have them notify the Captain and he can fill me in……thanks 😉