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JCPenney, Simon Property and Brookfield reach deal: report

Lucas Manfredi

Mall owners Simon Property and Brookfield Property Partners have reached an agreement in principle to acquire JC Penney in a deal valued at roughly $800 million, sources familiar with the situation told the Wall Street Journal.

The move will keep the struggling retail chain afloat after the company filed for bankruptcy back in May as its stores were shuttered due to the coronavirus pandemic.

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Simon and Brookfield, J.C. Penney’s landlords, will reportedly own about 490 of the retailer’s remaining 650 stores. Meanwhile, a group of lenders will own 160 locations as well as the retailer’s distribution centers in return for forgiving some of JC Penney’s $5 billion in debt. According to the Journal, the landlords will pay the lenders rent on those 160 stores and distribution centers.

The sources also noted that Simon and Brookfield are paying roughly $300 million in cash and assuming $500 million in debt.

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The Journal reported last month that JC Penney intended to sell its assets out of bankruptcy to top lenders after hitting a stalemate with other bidders, including Simon Property and Brookfield.

Simon Property, Brookfield Partners, and JC Penney did not immediately return FOX Business' requests for comment.

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