Simon Property offers $10 billion for General Growth

Simon, the largest U.S. real estate investment trust, said on Tuesday that it would offer $6 per share, or roughly $1.9 billion, plus a stake in property assets it valued at about $3 per share.

General Growth shares jumped 10.6 percent to $10.40 in trading before the market opened.

Simon expects the transaction to add to its funds from operations, a key profit measure for a real estate investment trust, in the first year after closing.

General Growth's official unsecured creditors committee supports the offer, Simon said in a statement.

The offer would provide a 100 percent cash recovery of par value plus accrued interest and dividends to all General Growth creditors, an amount totaling about $7 billion.

General Growth declared bankruptcy in April with 158 of its 200-plus malls after trying for months to refinance its debt. It listed total assets of $29.56 billion and total debt of $27.29 billion.

The Chicago-based company, the second-largest U.S. mall owner, owns such valuable properties as South Street Seaport in New York and Fashion Show in Las Vegas.

Indianapolis-based Simon owns or has an interest in 382 properties comprising 261 million square feet of leasable space in North America, Europe and Asia. These include such well-trafficked malls as Roosevelt Field on New York's Long Island and Sawgrass Mills Circle near Fort Lauderdale, Florida.

The transaction is not subject to a financing condition. Simon plans to finance it with cash on hand, existing credit facilities and equity investments in the acquisition by institutional investors.

Lazard Ltd , JPMorgan and Morgan Stanley are financial advisors to Simon. Wachtell, Lipton, Rosen & Katz is legal advisor.

Simon shares were up 23 cents at $72.23 in premarket trading.

(Reporting by Helen Chernikoff; Editing by Lisa Von Ahn and Gerald E. McCormick)

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