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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of Earliest Event Reported)
June 2, 1998
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General Growth Properties, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-11656 42-1283895
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
110 N. Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 960-5000
N/A
(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On June 2, 1998, General Growth Properties, Inc. (together with
entities owned or controlled by it, including GGP Limited Partnership, the
"Company") acquired in a negotiated arms-length transaction the U.S. retail
property portfolio (the "MEPC Portfolio") of MEPC plc, a United Kingdom based
real estate company ("MEPC"), through the purchase of the stock of the three
U.S. subsidiaries of MEPC that directly or indirectly own the MEPC Portfolio
(the "MEPC U.S. Subsidiaries"). The stock of the MEPC U.S. Subsidiaries was
acquired by a newly formed corporate subsidiary of the Company that will elect
to be taxed as a REIT. The Company acquired the MEPC Portfolio for
approximately $871 million (less certain adjustments for tenant allowances,
construction costs, MEPC U.S. Subsidiary liabilities and other items). The
Company borrowed approximately $830 million from Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc. to finance
the purchase price for the stocks, which was paid in cash at closing. The
Company repaid approximately $217 million of the loan on June 10,1998 with a
portion of the net proceeds of the Company's recent public offering of
Depositary Shares. The loan initially bears interest at the rate of 6.56% per
annum, which rate will be adjusted monthly to equal LIBOR plus 0.9%. The loan
is secured by the MEPC Portfolio and will mature on June 1, 1999.
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The MEPC Portfolio consists of eight enclosed mall shopping centers: the Apache
Mall in Rochester, Minnesota, the Boulevard Mall in Las Vegas, Nevada, the
Cumberland Mall in Atlanta, Georgia, the McCreless Mall in San Antonio, Texas,
the Northridge Fashion Center in Northridge (Los Angeles) California, the
Regency Square Mall in Jacksonville, Florida, the Riverlands Shopping center in
LaPlace, Louisiana and the Valley Plaza Mall in Bakersfield, California. The
MEPC Portfolio is comprised of approximately 7.7 million square feet of gross
leasable area, including anchor stores (which may or may not be owned by the
Company), freestanding stores and mall tenant stores ("GLA"). The mall store and
freestanding store portions of the MEPC Portfolio are currently 87% leased. The
following chart sets forth certain additional information concerning the MEPC
Portfolio:
<TABLE>
<CAPTION>
TOTAL
GLA/MALL
YEAR AND
OPENED/ FREESTANDING
NAME OF REMODELED GLA (SQUARE ANCHOR
CENTER/LOCATION OR EXPANDED FEET) ANCHORS VACANCIES
--------------- ----------- ------------ ------------------------ ---------
<S> <C> <C> <C> <C>
Northridge Fashion Center 1971/1995 1,402,325/ Sears, Macy's, JCPenney, None
Northridge (Los Angeles), CA 627,897 Robinson's-May
Regency Square Mall 1967/1982, 1,347,751/ Sears, Dillard's, JCPenney, None
Jacksonville, FL 1992, 1998 536,120 Gayfers, Montgomery Ward
The Boulevard Mall 1960/1992 1,210,050/ Sears, Dillard's, JCPenney, None
Las Vegas, NV 352,653 Macy's
Cumberland Mall 1973/1989 1,198,440/ JCPenney, Macy's, Rich's, None
Atlanta, GA 323,447 Sears
Valley Plaza Mall 1967/1986- 1,094,253/ Sears, Macy's, JCPenney, None
Bakersfield, CA 1988 339,202 Robinson's-May, Gottschalks
Apache Mall 1969/1990- 752,603/ Dayton's, JCPenney, Sears, None
Rochester, MN 1992 266,903 Montgomery Ward
McCreless Mall 1962/1997 477,846/ Montgomery Ward, Beall None
San Antonio, TX 268,963
Riverlands Shopping Center 1965/1984 183,808/ Winn-Dixie(1) None(1)
LaPlace, LA 136,874
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</TABLE>
(1) Winn-Dixie does not occupy its space but is currently paying rent under a
lease which expires in October 2002.
Item 7. Financial Statements and Exhibits.
(a), (b) The requisite financial information is hereby incorporated herein
by reference to the Company's Current Report on Form 8-K/A (File No. 1-11656)
dated June 2, 1998.
(c) See Exhibit Index attached hereto and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
GENERAL GROWTH PROPERTIES, INC.
By: /s/ Bernard Freibaum
---------------------------------
Bernard Freibaum
Executive Vice President and
Chief Financial Officer
Date: June 17, 1998
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EXHIBIT INDEX
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Exhibit Name Page
Number ---- Number
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2.1 Stock Purchase Agreement, dated as of April 17, 1998,
among MEPC plc, MEPC North American Properties
Limited, U.K.- American Holdings Limited and GGP
Limited Partnership.*
2.2 Amendment to Stock Purchase Agreement, dated as of
June 2, 1998, among MEPC plc, MEPC North American
Properties Limited, U.K.-American Holdings Limited,
GGP Limited Partnership and GGP Holding, Inc.
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* Previously filed by the Company as Exhibit #2.2 to its Current Report on Form
8-K dated May 26, 1998.
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EXHIBIT 2.2
AMENDMENT TO
STOCK PURCHASE AGREEMENT
AMENDMENT dated as of June 2, 1998 (the "AMENDMENT") to the Stock Purchase
Agreement dated as of April 17, 1998 (as previously amended, the "AGREEMENT")
among MEPC PLC, an English company, MEPC NORTH AMERICAN PROPERTIES LIMITED, an
English company, U.K.-AMERICAN HOLDINGS LIMITED, a company organized under the
laws of Jersey (collectively, "SELLERS"), GGP LIMITED PARTNERSHIP, a Delaware
limited partnership ("GGPLP") and GGP HOLDING, INC., a Delaware corporation
("GGP HOLDING" and, together with GGPLP, "BUYERS").
WHEREAS, GGPLP has assigned its rights under the Agreement to GGP Holding
and GGP Holding has assumed the obligations of GGPLP under the Agreement,
subject to Section 13.04 of the Agreement;
WHEREAS, pursuant to Section 13.02 of the Agreement, any provision of the
Agreement may be amended by a written instrument signed by each party; and
WHEREAS, the Sellers and Buyers desire to enter into this Amendment to
effect certain changes to the Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Amendment and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Sellers and Buyers hereby agree
as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined shall have the meanings given such terms in the Agreement.
2. Amendment to Defined Term "Parent Notes". The defined term "Parent
Notes" in Article 1 is hereby amended and restated as follows: "'PARENT NOTES'
means the notes of one or more members of the Company Group payable to Parent
or its Subsidiaries (other than members of the Company Group), evidencing the
Parent Receivables."
3. Amendment to Defined Term "Parent Receivables". The defined term
"Parent Receivables" in Article 1 is hereby amended and restated as follows:
"'PARENT RECEIVABLES' means the combined obligations of the Company Group owed
to Parent or its Subsidiaries (other than members of the Company Group),
including principal and accrued interest, as of the Closing Date after giving
effect to the Restructuring; provided that Parent Receivables shall not include
the obligations evidenced by the promissory note dated as of June 1, 1998 of
MEPC American Holdings Inc. in the aggregate principal amount of $25,000,000
and payable to Parent."
4. Amendments to Section 2.03 of the Agreement. Section 2.03 of the
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Agreement is hereby amended by replacing the words "May 31, 1998" with the words
"June 2, 1998".
5. Amendment to Section 2.04(a) of the Agreement. Section 2.04(a) of the
Agreement is hereby amended by inserting at the end of paragraph (a) the
following sentence: "The Closing Balance Sheet shall include a liability for
the amount of tenant improvement costs arising from the Claim Jumper lease at
Northridge Fashion Center in excess of the amount previously credited to Buyer
at Closing."
6. Construction Completion Amount. The parties agree that for purposes
of Section 2.07 of the Agreement, the sum of the final Construction Completion
Amount and the cost to complete the remaining site work for Pacific Theatres at
Valley Plaza shall be $10,500,000.
7. Allocation of Purchase Price. The parties agree that the Preliminary
Purchase Price shall be allocated among the Notes and Shares as set forth on
Schedule 4 hereto, and the Purchase Price shall be allocated on a basis
consistent with such allocation.
8. Amendment to Section 3.05(c). Section 3.05(c) of the Agreement is
hereby amended and restated as follows:
"Each of the Parent Notes and the Finance Notes are duly authorized and
validly issued and constitute a valid and binding obligation of each of the
Persons issuing such Note. The Parent Notes are owned by Parent and/or its
Subsidiaries (other than members of the Company Group) free and clear of any
Encumbrance and, in the event of a Note Election, Parent will transfer and
deliver (and/or cause to be transferred and delivered) to Buyer at the Closing
valid title to the Parent Notes free and clear of any Encumbrance other than
any Encumbrance arising as a result of actions of Buyer. The Finance Notes are
owned by MEPC Finance free and clear of any Encumbrance and, in the event of a
Note Election, Parent will cause MEPC Finance to transfer and deliver to Buyer
at the Closing valid title to the Finance Notes free and clear of any
Encumbrance other than any Encumbrance arising as a result of actions of
Buyer."
9. Amendment to Section 3.06(a). The first sentence of Section 3.06(a)
of the Agreement is hereby amended by inserting ", limited liability company"
after "corporation" and before "or partnership", and the second sentence of
Section 3.06(a) of the Agreement is hereby amended by inserting the word
"limited liability company" after "each" and before "corporate".
10. Amendment to the Second Paragraph of Section 5.07 of the Agreement.
Section 5.07 of the Agreement is hereby amended by deleting in its entirety the
second paragraph of Section 5.07 and replacing it with the following:
"If, prior to Closing, the Sellers receive any such estoppel certificates,
the Sellers
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shall promptly deliver a copy of such estoppel certificates to Buyer. If
the facts set forth in any estoppel certificate delivered to Buyer prior to
Closing (by the Sellers or directly by a tenant) differ from those set
forth in the Sellers' representations and warranties as set forth in this
Agreement, then, after the Closing, the Sellers' representations and
warranties shall be deemed amended to conform to the facts stated in such
estoppel certificate."
11. Amendment to Section 5.08. The last sentence of Section 5.08 is
hereby amended by adding at the end thereof the following proviso: "provided
that Sellers shall reimburse Buyer for $12,700.00 of the survey costs incurred
by Buyer."
12. Amendment to Section 8.03(a). The proviso to the first sentence of
Section 8.03(a) and the second sentence of Section 8.03(a) are hereby amended
and restated as follows:
"provided that the Sellers acknowledge that Buyer or its assignee's
election to be taxed as a REIT pursuant to Subchapter M of the Code, and the
Companies and the Company Subsidiaries' treatment as Qualified REIT Subsidiaries
(collectively, the "REIT ELECTION"), shall not be such an action, or omission to
act, which results in an increased Tax liability or reduction of any Tax Asset
of a Pre-Closing Period. Buyer agrees that the Sellers will have no liability
for any Tax resulting from any action or omission to act, referred to in the
preceding sentence (after giving effect to the proviso contained therein), of
any Company, Company Subsidiary, Buyer or any Affiliate of Buyer on the Closing
Date, and agrees to indemnify and hold harmless the Sellers and their Affiliates
against any such liability or reduction resulting from any such action or
omission to act."
13. Amendment to Section 8.05(b). The following shall be inserted at the
end of Section 8.05(b): "It is understood that, except as otherwise agreed
between the parties, all transactions occurring (or deemed to occur for federal
income tax purposes, including, by way of example and not of limitation, if
Buyer or its assignee makes a REIT Election) on the Closing Date shall be
reported on the Companies' Federal income tax return for the Tax Period ending
on the Closing Date."
14. Amendment to Section 8.06. The first sentence of Section 8.06 is
hereby amended by (i) deleting the phrase ", effective for any Post-Closing Tax
Period," and (ii) inserting after the words "Closing Date" in clause (ii) of
the proviso the following: "(it being agreed that the REIT Election is not such
a transaction)".
15. Amendment to Certain Schedules. Schedules 3.04, 3.06(a)(i), 3.09,
3.10(a), 3.11(b), 3.19 and 11.02(b) of the Agreement are hereby replaced in
their entirety by Schedules 3.04, 3.06(a)(i), 3.09, 3.10(a), 3.11(b), 3.19 and
11.02(b) attached hereto. Schedules 3.11(a)(viii) and 3.12 of the Agreement
are hereby supplemented by Schedules
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3.11(a)(viii) and 3.12 attached hereto.
16. Effect of Amendment. Except as amended hereby, the Agreement shall
remain unchanged, and the Agreement as amended hereby shall remain in full
force and effect.
17. Counterparts; Effectiveness. This Amendment may be signed in any
number of counterparts; the signatures on each counterpart shall be deemed to
be on the same instrument; each of such counterparts shall be deemed to be an
original; all of such counterparts shall be deemed to be a single instrument;
and signatures on any counterpart delivered by facsimile transmission shall
have the same effect as the original signatures. This Amendment shall become
effective when each party hereto shall have received a counterpart hereof
signed by the other party hereto.
18. Governing Law. This Amendment shall be governed by and construed in
accordance with the law of the State of New York, without regard to the
conflicts of law rules of such State which might cause the laws of any other
jurisdiction to govern this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
SELLERS:
MEPC PLC
By: /s/ Stephen East
Name: Stephen East
Title: Director of Corporate Finance
MEPC NORTH AMERICAN PROPERTIES LIMITED
By: /s/ Stephen East
Name: Stephen East
Title: Director
U.K.-AMERICAN HOLDINGS LIMITED
By: /s/ Stephen East
Name: Stephen East
Title: Director
BUYERS:
GGP LIMITED PARTNERSHIP
By: GENERAL GROWTH PROPERTIES, INC.,
its General Partner
By: /s/ Joel Bayer
Name: Joel Bayer
Title: Senior Vice President-Acquisitions
GGP HOLDING, INC.
By: /s/ Joel Bayer
Name: Joel Bayer
Title: Senior Vice President-Acquisitions
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