NEW YORK General Growth Properties Inc (GGP.N) is getting closer to filing a bankruptcy exit plan, with its board planning to meet on Monday to give final approval to the proposal, sources familiar with the matter said.
The plan, which would have General Growth exit as a stand-alone company, is backed by three large investors -- Brookfield Asset Management (BAMa.TO), Fairholme Capital Management and William Ackman's Pershing Square Capital Management, the sources said on Sunday.
General Growth, the second-largest U.S. mall owner, could file the plan in bankruptcy court as soon as after the close of markets on Monday, the sources said, declining to be named because these discussions are not public. The exact timing has not yet been finalized, though, they added.
Potential suitors are likely eagerly waiting the filing, which would give them further details about the plan. It could prove to be the starting gun for them to jump into the fray with rival bids.
"It's kind of a first step," one of the sources said.
The plan would give General Growth a floor for value and other suitors could come up with rival bids that could ultimately change the outcome, the source added.
Simon Property Group Inc (SPG.N), which had initially made a $10 billion takeover offer for General Growth, is weighing a higher bid. A new offer could see Simon partnering with Blackstone Group (BX.N) and sovereign wealth funds.
Another group of investors including Elliott Management and Paulson & Co is also interested in coming in with an offer to help fund General Growth's exit from bankruptcy.
That group has spoken with General Growth, but has not given anything concrete to the mall owner yet, the source said.
General Growth has also set meetings with its creditors' committee and equity committee for Tuesday morning, the source said.
The broad terms of General Growth's plan will be similar to offers that have already been announced, the sources said.
Brookfield has offered to invest $2.63 billion to bankroll an independent exit for General Growth, while Ackman and Fairholme are investing another $3.93 billion alongside Brookfield.
It would also give out warrants to buy 120 million shares to the plan's backers, which if approved would make a rival bid more expensive.
A General Growth spokesman could not be reached immediately on Sunday night for comment.
(For more M&A news and our DealZone blog, go to www.reuters.com/deals)
(Editing by Marguerita Choy)