U.S. real estate giant Simon Property Group (SPG) is proposing what is described as its "best and final offer," $6.5 billion or $20.00 per share to acquire General Growth Properties, Inc. (GGP) in a fully financed deal.

The proposal involves $5.00 in cash, $10.00 in shares of SPG common stock, at its current value, and the distribution to GGP shareholders of shares in General Growth Opportunities (GGO), valued by GGP at $5.00 per share. At $20.00 per share, this offer values GGP's equity at $6.5 billion in the aggregate and represents additional value of $2.6 billion, or a 66% premium, to the Brookfield-sponsored change of control recapitalization plan, which offers GGP shareholders an aggregate value of $3.9 billion. The acquisition would also include full cash recovery for unsecured creditors.

SGP chairman and CEO David Simon said in his letter to investors: "We are also prepared to sponsor the equity recapitalization of GGP, which would replace the Brookfield change of control recapitalization, based on an improved investment price of $11.00 per share, but without issuing any expensive and dilutive warrants. SPG's recapitalization proposal would result in significantly higher value and greater ownership of GGP for its existing shareholders than the Brookfield alternative."

SPG has also improved its previously submitted proposal to sponsor a GGP recapitalization by increasing the price per newly issued GGP share to $11.00. This change in the per share investment price would also apply to an SPG-sponsored recapitalization to the extent it is effected as a backstop of SPG's proposed acquisition of GGP.

"These offers are best and final. SPG will not participate in the bidding process in the GGP bankruptcy proceeding in any way once GGP commits to issue the warrants associated with the latest Brookfield-sponsored plan," Simon added.

Both of SPG's proposals would provide substantially more value for GGP's equityholders than the change of control recapitalization proposed by Brookfield, over and above the elimination of the highly dilutive and expensive warrants attached to the Brookfield plan. SPG will not participate in the bidding process in the GGP bankruptcy proceeding in any way once GGP issues warrants associated with the latest Brookfield-sponsored change of control recapitalization.