Brookfield circling U.S. mall owner: report

Canadian property manager Brookfield Asset Management Inc. is reportedly preparing to bid for a large slice of U.S. mall owner General Growth Properties Inc. 

According to a report in Tuesday's Wall Street Journal, the $3 billion US bid would allow General Growth to exit Chapter 11 bankruptcy protection with Brookfield as its largest shareholder.

Citing unnamed sources close to the bid, the bid could come as early as this week, the Journal report said.

The rumoured play is aimed directly at trumping an unsolicited offer made last week by rival Simon Property Group Inc.

The price tag of the Simon bid is closer to $10 billion as it includes an offer to pay cash to General creditors, but the issue is complicated by the fact that Brookfield is itself a major creditor to General, to the tune of more than $1 billion.     

Chicago-based General Growth filed for U.S. Chapter 11 bankruptcy protection in April 2009 when it buckled under debt accrued in a massive expansion plan.

There has been speculation that Canadian financial firms, who have emerged from the recession with much stronger balance sheets than their American counterparts, could be preparing a wave of southern acquisitions, hoping to buy quality assets at distressed prices.

Last summer, Brookfield itself was a partner with Export Development Canada in extending credit to struggling Canadian companies.

Toronto-based Brookfield manages more than $100 billion in assets, with a focus on infrastructure and real estate. The company, already one of the largest owners of office space in North America, recently raised $5 billion from institutional real estate investors eager to participate in a newly created fund for making acquisitions.