A volley of polite but pointed rebuffs and rebuttals have been exchanged between Adam Metz, CEO of General Growth Properties, owner of three shopping malls in the San Fernando Valley, and Simon Property Group CEO David Simon during the past 72 hours, after the latter made a $9 per-share offer for Chapter-11-embroiled General Growth. In a Feb. 16 letter to Simon, Metz dismissed the cash offer as insufficient to “preempt the process (of exploring)…all avenues to emerge from Chapter 11 and maximize value for all the company’s stakeholders.” General Growth owns Northridge Fashion Center, Glendale Galleria, and Burbank Town Centre. It also owns 200 million square feet of retail space in North America, which houses more than 24,000 retail stores nationwide. Simon wasted no time firing off a terse response to Metz. In a letter dated Feb. 17—the day after Metz’ letter was penned—he expressed clear irritation about his offer being characterized as a mere “indication of interest” in buying GGP. “It is simply wrong to characterize our offer as an ‘indication of interest,’” wrote Simon. “As you well know, we have made a firm, fully financed $10 billion offer that provides immediate 100% cash recovery of par value plus accrued interest and dividends to all unsecured creditors, plus more than $9 per share in value to shareholders.” Simon continued, reminding Metz that his offer had no financing contingency, adding that the transaction could be completed quickly. Then, in an end run aimed squarely at General Growth’s shareholders and creditors, Simon assaulted the results of Metz’ leadership and called into question his judgment. “Given the clear risks of pursuing an alternative plan, the current state of the retail industry and your company’s past history of risky financial choices, your lack of urgency should deeply concern creditors and shareholders,” Simon wrote. He also reminded Metz that time is passing, and accused General Growth of “inappropriately speculating with creditors’ money.” Simon also dismissed General Growth’s other prospects for emergence from bankruptcy, saying his offer is “superior to any third-party proposal or stand-alone plan that would result from your ‘process.’” Apparently undisturbed by Simon’s admonitions, Metz replied with a single paragraph reiterating his declination of Simon Property Group’s original offer. “Your objectives are not aligned with ours,” Metz wrote. “We hope you will, nonetheless, participate in our process.” Thom Senzee
CEOs Exchange Sharp Words in $10 Billion Bid for General Growth
