H  WITH TAKEOVER BID, SIMON AIMS TO CONTROL 30 PERCENT OF U.S. MALLS 

S1  After months of speculation, the Simon Property Group on Tuesday finally made an unsolicited $10 billion offer for General Growth Properties, its bankrupt rival.
S2 But General Growth quickly rebuffed the approach, calling the bid too low.

S3  If successful, the move would make Simon the biggest mall operator in the country, controlling about 30 percent of malls in the United States, according to analysts from Bank of America Merrill Lynch.

S4  Merging the two companies, whose portfolios are roughly the same size, would also unite two of the most well-known names in the business.

S5  In a letter sent to Simon late Tuesday, General Growth's chief executive, Adam Metz, said that he would welcome discussions within the confines of the bankruptcy process.

S6  "We and our board of directors have given considerable thought to your indication of interest and have concluded based on discussions with other interested parties that it is not sufficient to pre-empt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the Company's stakeholders," Metz said.

S7  A merger would allow General Growth to finally remove itself from a 10-month, complicated Chapter 11 case.
S8 Begun 56 years ago as a shopping center in Iowa, General Growth grew to be one of the nation's biggest mall companies, operating prized malls like the Ala Moana Center in Honolulu, only to run aground because of debt troubles after acquiring the Rouse Co. for $12.6 billion in 2004.

S9  Simon is regarded by analysts as one of the best-managed mall operators in the business.

S10  Over the last year, Simon has been building up its war chest to prepare for acquisitions to take advantage of depressed commercial real estate prices, with General Growth squarely in its sights.
S11 It said on Tuesday that its offer would be largely financed by its cash on hand and existing credit agreements.

S12  Simon's move is meant to pre-empt General Growth's own plan to emerge from bankruptcy, which may include financial help from another mall operator, Brookfield Asset Management, that owns some of its unsecured debt.

S13  Simon is portraying its offer as speeding General Growth's exit from Chapter 11 by paying off $7 billion in unsecured debt in full and in cash and by assuming about $21 billion in secured debt.
S14 Under the terms of its proposal, Simon would pay about $6 a share in cash.
S15 It would also distribute ownership in General's planned community development, valued at about $3 a share.

