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BROOKFIELD NEWS, Jan. 04, 2021 (GLOBE NEWSWIRE) -- Brookfield Asset Management Inc. ("Brookfield") (NYSE:BAM, TSX:BAM) with institutional partners announced today that it has made a proposal to Brookfield Property Partners L.P. ("BPY") (NASDAQ:BPY, TSX:BPY) to acquire all of the limited partnership units of BPY that it does not already own ("BPY units") at a value of $16.50 per BPY unit, or $5.9 billion in total value.
Subject to pro-ration, BPY unitholders would have the ability to elect to receive, per BPY unit, $16.50 in cash, 0.40 Brookfield Class A shares, or 0.66 of BPY preferred units with a liquidation preference of $25.00 per unit. Pro-ration will be based on a maximum cash consideration of $2.95 billion (50% of the total value of the units), a maximum of 59.5 million Brookfield shares (42% of the total value of the units), and a maximum value of $500 million of BPY preferred units (8% of the total value of the units). If unitholders collectively elect to receive in excess of $500 million BPY preferred units, the amount of BPY preferred units can increase to a maximum of $1.0 billion, offset against the maximum amount of Brookfield shares. The maximum amount of cash consideration would not be affected.
The $16.50 per unit price represents a premium of 14.9% and 14.0%, respectively, to the closing price of the BPY units on the TSX and Nasdaq on December 31, 2020. This price also represents a premium of 8.9% and 29.4%, respectively, to the 30-day and 180-day volume-weighted average price of the BPY units on the Nasdaq.
Nick Goodman, CFO of Brookfield Asset Management stated, "The offer presents an excellent opportunity for BPY unitholders to either monetize their units in cash at a premium to recent trading prices, continue to invest with us in the upside of the portfolio via Brookfield shares, or select BPY preferred units designed for income-oriented investors who would like to maintain similar dividend income which they receive from BPY today in a preferred instrument, based on what is best for them."
He continued, "The privatization will allow us to have greater flexibility in operating the portfolio and realizing the intrinsic value of BPY's high-quality assets."
Brookfield will ensure that holders of the Class A stock of Brookfield Property REIT Inc. (NASDAQ:BPYU) will be entitled to receive the same per share consideration as BPY unitholders under the proposal upon exchange of their shares into BPY units. It is also expected that the BPYU 6.375% Series A Cumulative Redeemable Preferred stock would be redeemed at its par value of $25.00 per share in connection with the proposed transaction. Brookfield is not proposing to acquire other securities of BPY and its subsidiaries, which are expected to remain outstanding.
