Ther market is thinking SPG can steal or at least get a good enough price so as to be accretive to their earnings. GGP's price is not moving because the market does not know what the offer will be plus Simon through in some doubt yesterday whether there will even be a bid.
good question, but the last time SPG offered $9, GGP rallied... so not necessarily. but I do remember SPG rallied when they made that first low ball offer.
Heck who knows, SPG might be rallying for some reason totally unrelated to GGP (some other company buyout).
There is a stalking horse bid already in play. Simon must best that or he has to walk away. There is no art of the deal. The only art here is NUMBERS. If he wants to impress the Court enough to take over that status he MUST pay up!!!
Little harsh there Lex. Remember this guy is being advised by JPMorgan and Lazard as well as Wachtell Lipton, collectively some of the best minds in corporate America when it comes to mergers and acquisitions.
These are all games hoping to force the hands of GGP to do something that gives their team some advantage.
It will not work, since GGP has assembled its own Dream Team and is matching SPG's team move for move.
Our original conclusion that this is a very attractive and desirable acquisition for SPG remains in tact.
I take it as a positive that SPG and GGP attorneys were talking about anti-trust issues as it suggests GGP would not be incurring that cost unless it had some indication that SPG was prepared to offer a respectable price.
In the end SPG will make its best offer, which I beleive will be better than the current $15 soft offer from BAM/Ackman. Whether it is high enough to win GGP BOD approval is something we shall see.
Otherwise, all this other stuff is just noise to be ignored.
All of this bantering now it to make his next bid look like his best and final. He will come in in the (very)low 20 range which will look good considering all of the acting/positioning that is going on right now.
He will argue that his bid is a 30 to 35% premium to today's price. All he is trying to do is keep the price down so that he can make this argument stick. He does not want to talk about how cheap he is buying the assets - he wants to position to talk about how he paying up for the company. Big difference.
All of these leaks are free and help improve his bid position. He would be crazy not to do what he is doing in the news. It helps him tremendously in the long run. That doesn't mean that we have to like it - he is still a prick!