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Brookfield Asset Management offers to buy limited partnership units of Brookfield Property for $5.9 billion

Brookfield Asset Management Inc. BAM, -0.22% said Monday that it has offered to buy all the limited partnership units of Brookfield Property Partners LP BPY, -1.16% that it does not already own for $16.50 per unit, or $5.9 billion in total. Unitholders can elect to receive $16.50 in cash per each BPY unit, 0.40 Brookfield Class A shares or 0.66 of BPY preferred units with a liquidation preference of $25 per unit. The $16.50 per unit price represents a premium of 14.9% and 14.0% respectively over the closing price of the BPY units on the Toronto Stock Exchange and Nasdaq on Dec. 31. “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 Chief Financial Officer Nick Goodman said in a statement. The offer has been presented to the board of directors of the general partner of BPY and the board has been asked to review it and appoint a special committee of independent directors to value the units. Once that valuation has been determined, Brookfield will seek to enter an agreement with BPY. BPY shares soared 15.4% in premarket trade, but are down 20% in the last 12 months, while the S&P 500 SPX, +0.64% has gained 16%.

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