“There’s always more uncertainty when you’ve got either a company that you’re contracting with in bankruptcy, or the owner of that company is in bankruptcy,” King said.
“It just adds a lot of uncertainty, and I think these days we’ve got a lot of uncertainty already, so to eliminate that uncertainty would be a good thing.”
The “fully financed” offer from Simon Properties included $9 billion in cash as part of an effort to quickly pay off creditors and end General Growth’s bankruptcy proceedings, according to the firm.
“Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value,” David Simon, chairman and chief executive of the firm, said in a statement.
“Our offer provides much-needed certainty to conclude General Growth’s protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed.”
If a deal did go through, Simon Properties would become the dominant mall operator in the region, and would likely begin making upgrades, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corporation.
“I think what they would do is probably take some steps to ensure that the malls are competitive,” Kyser said.
“What they would do is do some improvements, say if you’re looking at the Glendale Galleria, the big question is what about the old Mervyn’s site?”