CHICAGO, March 4 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP), today announced the execution of a merger agreement under which
it will acquire JP Realty, Inc. (NYSE: JPR). The total acquisition price will
be approximately $1.1 billion including approximately $440 million in cash,
assumption of approximately $460 million of existing debt and $116 million of
existing preferred operating units. Holders of JP Realty, Inc. common stock
will receive $26.10 per share in cash. Holders of operating partnership units
in Price Development Company Limited Partnership ("Price") will receive either
$26.10 in cash or .522 8.5% Series B convertible preferred partnership units
that will be issued by General Growth Properties Limited Partnership and are
convertible into GGP common stock based upon a conversion price of $50 per
share.
Including the benefits from anticipated efficiencies and synergies, GGP
expects to generate an unleveraged return of approximately 10% on cost during
the first twelve months of ownership. General Growth intends to fund the cash
portion of the purchase price with a combination of cash and marketable
securities on hand, new secured nonrecourse loans on certain unencumbered
General Growth assets, and new unsecured short-term acquisition loans. The
transaction is expected to close during the second quarter of 2002 and is
subject to customary closing conditions.
Last month GGP announced that estimated 2002 Funds From Operations per
fully diluted share would range from $5.31 to $5.56. If this transaction
closes in the second quarter of 2002, it is currently anticipated that the
company would increase its estimate of the low end of the range.
There are 18 regional mall properties in JP Realty that comprise
approximately 10.3 million square feet of gross leasable area (GLA) and are
located in eight states. In addition, there are 26 community centers with
total GLA of 3.4 million square feet. The portfolio includes an additional
1.3 million square feet of industrial properties. Occupancy at the malls is
currently 83% and 2001 sales averaged approximately $260 per square foot.
"In the past, I have often described the many reasons why General Growth
acquires, develops and manages regional shopping centers. These reasons
include the creation of value, earnings accretion, and creating additional
market share throughout the United States," stated John Bucksbaum, chief
executive officer of General Growth. "I am very pleased to announce that we
have signed a merger agreement to acquire JP Realty, the dominant mid-market
retail property development and management company in the Intermountain region
of the United States. We look forward to adding these properties to our
existing portfolio of 141 malls. By buying strategically, and buying smart,
we have created value for today and for the future," he added.
This marks the fifth portfolio acquisition for GGP since becoming a
publicly traded real estate investment trust in April 1993. Following this
transaction, General Growth will have acquired ownership interests in 120
regional malls with an aggregate value of approximately $10 billion.
Conference Call/Webcast
General Growth Properties will conduct a conference call on March 4, 2002
at 8:30 a.m. eastern standard time. At that time John Bucksbaum, Bob Michaels
and Bernie Freibaum will provide additional details about the transaction and
answer questions regarding the acquisition. The call-in number is
1-888-469-0649. Passcode: GGP. A replay of the call will be available at
1-888-568-0743, Passcode: GGP. A live webcast of the conference call can be
accessed on the investment page of the company website
(http://www.generalgrowth.com). The call will be archived subsequent to the end of
the live webcast.
General Growth Properties, Inc. is one of the oldest and most experienced
shopping center owners, developers and managers in the United States. It
currently owns interests in and/or manages 141 shopping malls in 39 states,
comprising approximately 125 million square feet of retail space.
This release may contain forward-looking statements that involve risks and
uncertainties. Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements as a result of a
number of risks, uncertainties and assumptions. Representative examples of
these factors include (without limitation) general industry and economic
conditions, interest rate trends, cost of capital and capital requirements,
availability of real estate properties, competition from other companies and
venues for the sale/distribution of goods and services, shifts in customer
demands, tenant bankruptcies, changes in operating expenses, including
employee wages, benefits and training, governmental and public policy changes
and the continued availability of financing in the amounts and the terms
necessary to support future business. Readers are referred to the documents
filed by General Growth Properties, Inc. with the SEC, specifically the most
recent reports on Forms 10-K and 10-Q, which identify important risk factors
which could cause actual results to differ from those contained in the
forward-looking statements.
The new 8.5% convertible preferred operating partnership units will be
issued in a private placement and have not or will not be registered under the
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exception from registration requirements.
SOURCE General Growth Properties, Inc.
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Related links:
http://www.generalgrowth.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/19990208/CGM015
PR Newswire Photo Desk, +1-888-776-6555 or +1-212-782-2840
Company News On-Call:
http://www.prnewswire.com/comp/110740.html
CONTACT:
John Bucksbaum, +1-312-960-5005, or Bernard
Freibaum, +1-312-960-5252, both of General Growth Properties
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