General Growth Properties (GGP) Repurchase 28.3M Shares in Q3, Including 25M from Pershing Square

September 13, 2013 7:04 AM EDT
General Growth Properties, Inc. (NYSE: GGP) announced the acquisition of 28,345,108 of its common shares during the third quarter of 2013 through September 12, 2013. The average share price was $20.00 for total consideration of $567 million. The repurchase activity included 25,000,000 common shares acquired from affiliates of Pershing Square Capital Management, L.P. on September 12, 2013, at $20.00 per share. The Company used available cash resources.

The repurchases reduced the Company's total diluted common shares outstanding to approximately 964 million shares. Assuming the repurchases had occurred at the beginning of 2013, the pro forma positive impact on the Company's full year 2013 funds from operations per diluted common share would have been $0.03 annualized and the positive impact on GAAP net income per diluted common share would have been $0.01 annualized. The Company previously issued earnings guidance for 2013 on July 29, 2013, in its second quarter 2013 earnings release.

Chief Executive Officer Sandeep Mathrani stated the Company is "acquiring the shares at a capitalization rate of approximately 6%. We believe this is a discount to private market valuation for high-quality U.S. retail properties." The capitalization rate is based on full year 2013 Company Net Operating Income of approximately $2.24 billion, as previously disclosed. As of June 30, 2013, the Company disclosed it had approximately 993 million shares outstanding on a fully-diluted basis and net debt of approximately $18.15 billion.

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