When Simon compares their offer, their math is backwards. It isn't $15/share then take away $2.50/share for warrants, it is $15/share AFTER the warrants are factored in. So, at $2.50/share it puts the fair valuation of GGP around $17.50/share. This is why the BOD voted for the BAM deal, because the full valuation of GGP is at $17.50/share versus Simon at $15/share.
Simon is trying to spin it the other way to keep it cheap but the BOD saw right through it. Simon will not just have to go to $17.50/share, they may actually have to go to $18 or more to make a compelling case. This is because of the illusion of the anti-trust concerns. I say illusion because there is absolutely no real anti-trust issues here. Just look at the airline deal right now and you can see that Simon+GGP is nothing close to that.
My bet is that Simon won't go to $18 but will come in at $17.50 to claim on par with the Brookfield bid.
Upon consummation of the Plan, the Interim Warrants shall be replaced with warrants to purchase (a) 60 million New Common Shares at an exercise price equal to $10 per share, and (b) 40 million GGO Shares at an exercise price equal to $5 per share, in each case having the same expiry date as the Interim Warrants.
Simon is only talking about the added cost in an acquisition scenario. Warrants are valued using Black-Scholes model (includes variation and price). So the actual cost to acquire would be Price/share + (value of warrants). So, bottom line if total enterprise value is equal in all scenarios, as value of warrants increase from zero, price/share decreases.
The actual cost to shareholders in a stand-alone situation depends on the stock price in 7 years and what GGP can do with the $1.8B at that time.