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The Unfolding GGP Saga

The fate of Chicago-based REIT General Growth Properties remains in flux as the major players that will determine its future continue to jockey for position and trade pointed barbs.

Much of the activity occurred in the run-up to a hearing at the U.S. Bankruptcy Court in New York in early March. There, Judge Allan Gropper granted General Growth a four-month extension on its exclusivity period to file a reorganization plan, with the right to request another extension if needed.

In the coming months, General Growth will pursue two paths. It will conduct a process to consider outside offers for the company. Simultaneously, it is pursuing a plan to recapitalize the firm and keep it independent and possibly break it into two distinct entities.

Here is a summary of how the saga has unfolded since early February.

Monday, February 8: Indianapolis-based Simon Property Group sends a letter to General Growth's board with a $10 billion offer to buy the company. The offer is said to be backed by a significant portion of General Growth's creditors. The plan offers to pay off all of General Growth's unsecured debt obligations — about $7 billion — and offers $9 per share to shareholders. The offer would result in Simon owning about 40 percent of the regional malls in the United States. Simon also hints that it would bring in an institutional partner to fund the acquisition.

Monday, February 15: Having gotten no response, Simon goes public with its February 8 letter, as well as a follow-up letter dated that morning reiterating the offer. That evening, General Growth responds with a letter of its own, rejecting Simon's terms, but inviting it to continue to participate in General Growth's restructuring process.

Tuesday, February 16: Simon sends sharply-worded response chastising General Growth's approach and asserting that it is the only bidder in a position to maximize value for General Growth's shareholders and immediately satisfy its unsecured debt holders.

Thursday, February 18: General Growth sends a terse response reiterating its commitment to a process that will allow it to consider more offers besides Simon.

Friday, February 19: Word comes out that Simon may be talking with the Blackstone Group as a potential equity partner in its takeover bid. Simon sends yet another letter to General Growth criticizing General Growth's comments to a non-disclosure agreement draft that Simon had delivered at a February 8 meeting.

Tuesday, February 23: Word initially comes out that Canadian firm Brookfield Asset Management — one of General Growth's largest unsecured creditors — is prepping a bid to take a large ownership stake in General Growth.

Wednesday, February 24: General Growth outlines an $8.3 billion recapitalization plan that would split the firm in two. Under the details of the plan — which are presented to some creditors in a morning conference call — Brookfield would pledge $2.6 billion to the effort. The plan values General Growth at $15 per share. It would result in one firm — General Growth Properties — that would hold about 180 of the firm's malls with Brookfield owning 30 percent of the firm's shares. A smaller company, called General Growth Opportunities, would include many of General Growth's struggling or less valuable assets, its residential-development division, parcels of raw land and its headquarters building in Chicago.

Tuesday, March 2: General Growth takes the scheme it will present in bankruptcy court public. It lays out a 200-day timeline for emerging from bankruptcy. That same day, David Simon blasts General Growth for not sharing any data since signing a non-disclosure agreement.

Wednesday, March 3: After a heated hearing, General Growth is granted a four-month extension.

Friday, March 5: General Growth's stock returns to the New York Stock Exchange.

Tuesday, March 9: Fairholme Capital Management and Pershing Square Capital offer to invest $3.93 billion in backing for the plan conceived by General Growth and Brookfield Asset Management.

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