Simon Property withdraws bid to takeover General Growth after court clears alternative plan

Judge clears General Growth bankruptcy exit plan

LOS ANGELES — Simon Property Group Inc. says it is withdrawing its $6.5 billion bid to acquire rival shopping mall owner General Growth Properties Inc.

Simon issued its decision Friday after U.S. Bankruptcy Court Judge Allan Gropper in New York approved the plan by an investor group led by Canadian property manager Brookfield Asset Management Inc.

The plan calls for the investor group to invest $6.5 billion to help finance General Growth’s exit from Chapter 11 bankruptcy.

But it also includes a break-up fee for the investor group in the form of stock warrants in the event General Growth goes with another bidder. And Simon said that would make a bid for General Growth too expensive.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LOS ANGELES (AP) — Simon Property Group Inc.’s bid to acquire rival shopping mall owner General Growth Properties Inc. could hinge on the outcome of a bankruptcy court hearing underway in New York.

The hearing before U.S. Bankruptcy Court Judge Allan Gropper began Friday morning.

General Growth has asked Gropper to approve a plan for its exit from Chapter 11 bankruptcy protection that calls for a $6.5 billion investment from an investor group led by Canadian property manager Brookfield Asset Management Inc.

But the plan includes bid a break-up fee for Brookfield in the event General Growth goes with another bidder. Simon has called that provision a deal-killer and threatened to withdraw its offer for General Growth.