The acquisition would allow General Growth, the No. 2 owner of shopping centers, to emerge from Chapter 11 bankruptcy protection. General Growth filed for bankruptcy last year after buckling under the weight of billions in debt it racked up during a massive expansion effort fueled by cheap credit.
The move is Simon's second major acquisition in three months. In December, Simon offered $700 million in cash and stock to buy more than 60 outlet shopping centers from another competitor, Prime Outlets Acquisition Co.
Simon, which owns the Roosevelt Field, Walt Whitman and Smith Haven malls, is using its comfortable cash cushion and credit lines to take advantage of commercial property values that are off 40 percent from their peak in 2007.
General Growth has some prized centers, including the South Street Seaport in Manhattan. - AP