March 27, 2018 / 12:44 PM / in 7 months

BUZZ-Street View: Brookfield Property-GGP deal not favorable for malls

** Brookfield Property Partners LP to buy 66 pct of GGP Inc that it does not already own in a cash-and-stock deal that values GGP at about $15.3 bln

** BPY shares down 1.5 pct, while GGP shares up 1.1 pct premarket

DEAL RAISES MORE QUESTIONS THAN IT ANSWERS

** SunTrust says current offer for GGP’s high mall portfolio is “not” a favorable comparison for mall space

** “By our estimation, a more equitable offer for GGP stock would have been closer to $24.50/sh or $25/sh, not $23.50,” says SunTrust

** “GGP’s board decision to accept the bid could have a bit of a ripple effect across the mall sector,” says JP Morgan

** Deutsche Bank says deal price of $23.50 is a weak price point for rest of Mall REITs, with many investors thinking a deal of over $24/sh would be needed to close

** Deal raises new questions about true value of Mall portfolios for public investors, as well as private investors - DB

** Deal is not likely to be viewed positively for BPY as it is dilutive to NAV while also increasing exposure to retail properties - Canaccord

** Though final pricing could disappoint GGP shareholders, the revised bid will be enough to get deal done based on numerous prior conversations with shareholders - BMO (Reporting by Brijesh Patel in Bengaluru)

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