Not only is SPG & GGP a match made in heaven, if SPG did NOT buy GGP then BAM or another would and possibly overtake SPG as the #1 mall owner, causing competitive pressures far beyond that of a SPG/GGP combination.
By the same token, SGP owning GGP becomes a substantial owner that will achieve benefits and synergies (did I really just use that word?) that will benefit consumers, retailers, and mall support groups. Everybody wins!
Now it comes down to price. With SPG's forward P/E ratio of 12.60, if we equate that to GGP, then that lands the price at $25.84. Anything below that is a bargain. The share price of the acquisition of GGP could easily be argued higher (up to $58/share), but we want to get the best price we can, so for now cap it at $25/share.
And how is the real value of the real estate to be determined? Can't easily go to banks and ask for a loan based on their carrying costs, can they? After all, that would expose almost every major bank to be insolvent! The banks would have to come clean and mark the value to market and that is exactly what they can't do!
So, there must be private money available to do the financing. I don't believe it can be done at ANY price without huge dilution to existing shareholders. Then, factor in deflating property values, certain to deflate rents, vanishing cash flows and tenant profits and what's left? A bloated pig with unservicable debt!!
I believe another poster was spot on. SPG is desperately trying to keep GGP from exiting bankruptcy with renegotiated debt as they will then have the upper hand. It may even force SPG to file chapter 11 to survive. No way this deal makes sense and no way, in this economy, will it be accretive to SPG shareholders.
Further, I think it's a fallacy to think SPG is going to have leverage over rents. When your tenant is not making money they will simply not pay and move. So, SPG cannot raise the rent as some "analysts" think. That will empty out the remaining stores and all that's left is a big echo, echo, echo...