Los Angeles Simon Property Group is considering raising its $10 billion buyout offer for rival shopping mall owner General Growth Properties as early as this week, according to the Associated Press.
Simon sent a letter to General Growth this week saying it anticipates boosting its offer above that of a proposal put forth by General Growth and three of its largest stakeholders.
Despite being in Chapter 11 bankruptcy protection for nearly a year, General Growth finds itself in the unusual position of courting buyout offers that promise to pay off creditors in full and give shareholders a premium for their stock, the report noted.
Simon went public last month with its bid for General Growth, but it was rebuffed.
General Growth is looking for a higher offer and has put forward a plan to exit bankruptcy with an investment from Canadian property manager Brookfield Asset Management, Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of its largest shareholders.
General Growth is expected to seek approval from the bankruptcy court in coming weeks to designate the Brookfield-Fairholme-Pershing proposal as a "stalking-horse" bidder as it solicits other buyout offers. A stalking-horse bid is an initial offer for a bankrupt company's assets.
General Growth also plans to ask the court to approve so-called bid protections that would compensate the investor group should General Growth sell the company to another bidder. The company has previously outlined compensating the stalking-horse bidder with warrants to buy 60 million shares of General Growth at an exercise price of $15 a share.
U.S. Bankruptcy Judge Allan Gropper in New York has tentatively set April 13 to hear the request.