Simon ($SPG) offers to buy General Growth – mall operator goes shopping for bargains

Does the news of Simon Property Group (NYSE:SPG)[stckqut]SPG[/stckqut] mean that we are really out of the economic downturn? There is no question that this is a good sign. When companies try to use their bankroll to take advantage of companies that are less fortunate, it means that they are setting themselves up for future growth and expansion.

I haven’t commented on Simon on this site but I wouldn’t buy the stock before this event. My rule on avoiding major M&A activity (more than 10%) now comes into play here, I would avoid Simon for at least a year.

Simon Property Group Inc, the largest U.S. real estate investment trust, made on Tuesday what it called a $10 billion offer for the bankrupt General Growth Properties Inc that would pay creditors back in full and end one of the largest U.S. bankruptcies on record.

Simon said it would offer $6 per General Growth share, or roughly $1.9 billion, plus a stake in property assets it valued at about $3 per share.

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

Simon’s shares were roughly flat in premarket trading at $72.07 per share. They closed on Friday at $72 per share.

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