Simon Property Group, Inc. (NYSE:SPG - News) today announced that it has made a written offer to acquire General Growth Properties, Inc. (OTC Pink Sheets:GGWPQ.pk - News) in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash. The text of Simon's February 8, 2010 offer letter to General Growth, as well as a letter Simon sent today to General Growth, are below.
Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement. This consideration to creditors totals approximately $7 billion.
General Growth shareholders would receive more than $9.00 per General Growth share, consisting of $6.00 per share in cash and a distribution of General Growth's ownership interest in the Master Planned Community assets valued by General Growth at more than $3.00 per share. Simon is also prepared to offer Simon common equity instead of the cash consideration, in whole or in part, as payment to those General Growth shareholders or creditors who would prefer to participate in the upside of owning stock in Simon. Under Simon's offer, the existing secured debt on General Growth's portfolio of assets would remain in place.
The Official Committee of General Growth's Unsecured Creditors has advised Simon that it supports the Simon offer, and encourages General Growth to engage with Simon promptly to allow the proposed transaction to be considered by General Growth's creditors and shareholders as soon as possible.
David Simon, Chairman and Chief Executive Officer, said, "Simon's offer provides the best possible outcome for all General Growth stakeholders. Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed."
Mr. Simon continued, "This acquisition also offers a compelling value-creation opportunity for Simon shareholders. Simon's strong track record of successfully completing large acquisitions and our history of delivering superior property-level performance ideally position Simon to create additional value with General Growth's portfolio."
Michael Stamer, counsel for the Official Committee of General Growth's Unsecured Creditors, said, "Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result. We fully support and encourage prompt engagement by the company with Simon."
The transaction is not subject to a financing condition and would be financed through Simon's cash on hand and through equity co-investments in the acquisition by strategic institutional investors, with the balance coming from Simon's existing credit facilities. Simon expects the transaction to be immediately accretive to its Funds From Operations in the first year after closing.
Simon's offer is subject to confirmatory due diligence, which it believes can be completed within 30 days, and customary proceedings in the General Growth bankruptcy process, including bankruptcy court and creditor approvals. The transaction is also subject to negotiation of a definitive transaction agreement between Simon and General Growth which would provide for reasonable certainty of closing. Simon believes this can be accomplished promptly, simultaneously with the completion of confirmatory due diligence.
Lazard Ltd., J.P. Morgan and Morgan Stanley are acting as financial advisors to Simon and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.
Wednesday, February 17, 2010
Derma Sciences Prices Share Offering
Derma Sciences, Inc. (Nasdaq:DSCI - News), a specialty medical device and pharmaceutical company focused on advanced wound care, today announced the pricing of a public offering of 972,000 shares of DSCI common stock and 324,000 warrants to purchase shares of common stock at a price of $5.50. Each share, together with a warrant to purchase one-third of a share, was priced at $5.00. The Company has granted the underwriters a 45-day option to purchase up to an additional 145,800 shares of common stock and 48,600 warrants to purchase shares of common stock to cover over-allotments, if any.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq:RODM - News), acted as sole book-running manager for the offering.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq:RODM - News), acted as sole book-running manager for the offering.
Walgreen To Buy Duane Reade For $1B
Walgreen Co. said Wednesday it has agreed to buy the drugstore operator Duane Reade in a move that will more than quadruple the number of stores it has in the New York City metro area.
Walgreen, the nation's biggest drugstore operator, said it would pay about $623 million for Duane Reade Holdings Inc., which is the biggest drugstore chain in the city. Including $457 million in debt held by Duane Reade, the transaction is valued at $1.08 billion.
Duane Reade, which has been operating in the New York area for 50 years, is owned by a group that includes affiliates of the buyout firm Oak Hill Capital Partners. Walgreen said Duane Reade's sales totaled about $1.8 billion in 2009.
The deal, which requires regulatory approval, would include all 257 Duane Reade stores, along with the corporate office and two distribution centers. Most of those stores are in Manhattan, where Walgreen currently has 13 stores.
Walgreen, based in Deerfield, Ill., operates 70 stores in the New York area and had 7,162 stores overall as of Jan. 31. The company opened a new store in Times Square in 2008, but said it would take many years to match the amount of stores and the quality locations Duane Reade already has.
Walgreen said Duane Reade stores will keep their name after the deal closes, and it will decide over time on how to combine the two brands.
The deal unites two chains that are in transition. Walgreen is trying to improve sales by converting hundreds of stores to a new layout, and Duane Reade has done the same with 30 of its stores. Walgreen suggested it could get new ideas from Duane Reade. It plans to continue renovating Duane Reade stores, and all of them should be converted to the new format in four or five years.
Walgreen also praised Duane Reade's FlexRewards customer loyalty program, its private label products, and its "store within a store" Look Boutique section, where cosmetics and skin care products are sold in an area that looks more like a department store than a drug store.
Some analysts feel Walgreen is struggling to sustain its sales while making changes to its store layouts and its array of products. It plans to convert 3,000 stores by fall 2010.
The company will fund the buyout with existing cash and expects the deal to close by Aug. 31, the end of its current fiscal year.
Walgreen expects the deal to cut its profit by close to 10 cents per share in fiscal 2010 and by about 3 cents per share in fiscal 2011. The buyout will cut costs between $120 million and $130 million by the third year.
Shares of Walgreen rose 25 cents to $34.33 in morning trading.
Walgreen, the nation's biggest drugstore operator, said it would pay about $623 million for Duane Reade Holdings Inc., which is the biggest drugstore chain in the city. Including $457 million in debt held by Duane Reade, the transaction is valued at $1.08 billion.
Duane Reade, which has been operating in the New York area for 50 years, is owned by a group that includes affiliates of the buyout firm Oak Hill Capital Partners. Walgreen said Duane Reade's sales totaled about $1.8 billion in 2009.
The deal, which requires regulatory approval, would include all 257 Duane Reade stores, along with the corporate office and two distribution centers. Most of those stores are in Manhattan, where Walgreen currently has 13 stores.
Walgreen, based in Deerfield, Ill., operates 70 stores in the New York area and had 7,162 stores overall as of Jan. 31. The company opened a new store in Times Square in 2008, but said it would take many years to match the amount of stores and the quality locations Duane Reade already has.
Walgreen said Duane Reade stores will keep their name after the deal closes, and it will decide over time on how to combine the two brands.
The deal unites two chains that are in transition. Walgreen is trying to improve sales by converting hundreds of stores to a new layout, and Duane Reade has done the same with 30 of its stores. Walgreen suggested it could get new ideas from Duane Reade. It plans to continue renovating Duane Reade stores, and all of them should be converted to the new format in four or five years.
Walgreen also praised Duane Reade's FlexRewards customer loyalty program, its private label products, and its "store within a store" Look Boutique section, where cosmetics and skin care products are sold in an area that looks more like a department store than a drug store.
Some analysts feel Walgreen is struggling to sustain its sales while making changes to its store layouts and its array of products. It plans to convert 3,000 stores by fall 2010.
The company will fund the buyout with existing cash and expects the deal to close by Aug. 31, the end of its current fiscal year.
Walgreen expects the deal to cut its profit by close to 10 cents per share in fiscal 2010 and by about 3 cents per share in fiscal 2011. The buyout will cut costs between $120 million and $130 million by the third year.
Shares of Walgreen rose 25 cents to $34.33 in morning trading.
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