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David Simon goes for broke with $10 billion offer for rival

Family-run real estate giant Simon Property Group has made a written offer to acquire rival General Growth Properties in a fully financed transaction valued at more than $10 billion.

Highlighting the company's current cash-rich status, SPG's offer includes approximately $9 billion in cash. Existing secured debt on GGP's portfolio of assets would remain in place.

GGP has been operating under Chapter 11 bankruptcy protection since November 2009 and SPG's offer is backed by an unofficial alliance of GGP's creditors who said they fully support the offer.

David Simon, SPG's second-generation CEO and chairman, said their offer provides "the best possible outcome" for all GGP stakeholders. "Simon is in the unique position of being able to offer GGP creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude GGP's protracted reorganisation process," he continued.

As the largest public US real estate company, SPG has revenues in excess of $7 billion and currently owns or has an interest in 382 properties in North America, Europe and Asia. The company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide.

SPG was formed in 1993 when the majority of the shopping centre interests of Melvin Simon & Associates became a publicly traded company. Melvin Simon & Associates, owned by brothers Melvin and Herbert Simon, was founded in 1960.

The company briefly changed its name to Simon DeBartolo Group when, in 1996, SPG merged with former rival DeBartolo Realty Corp, which included the shopping mall interests of the Edward J DeBartolo Sr family. However, the company reverted to its original name in 1998 as the DeBartolo family resumed its private real-estate development operation, while retaining their interest in Simon.

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