By Boyd Erman
Simon Property Group (SPG) shouldn't get too cocky just yet about its bid for General Growth Properties (GGWPQ.PK), because Brookfield Asset Management Inc. (BAM) is lurking out there with the potential to swoop in and grab the big U.S. mall operator.
Brookfield has been buying General Growth bonds, amassing about $1 billion of the debt, and now has significant leverage to try to put together a better deal. One option is apparently to provide the cash the troubled company needs to pay off its creditors. Brookfield would get an equity stake in return, according to The Wall Street Journal.
If Brookfield doesn't manage to cut a deal, the worst-case scenario for Brookfield is a big win on the bonds of General Growth.
Simon and Brookfield have a history -- they both went after mall operator The Mills Corp. in 2007. (Toronto's Vaughan Mills was one of the malls in the portfolio.) In the end, Simon and a partner trumped Brookfield, but the Canadian company still walked away smiling thanks to a win on the Mills debt it owned.
Brookfield spokesman Denis Couture declined to comment on the General Growth situation.