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UNITE HERE: Brookfield Asset Management’s Offer to Buyout Brookfield Property Partners Is Less Than What Brookfield Has Said the Assets Are Worth

NEW YORK--(BUSINESS WIRE)--UNITE HERE, the hospitality union, has released a report questioning the price of Brookfield Asset Management’s [NYSE: BAM] offer to buy out public investors of Brookfield Property Partners’ [NASDAQ: BPY] at $16.50 per unit. The report analyzes pre- and post-pandemic statements by BPY and BAM consistently arguing that BPY is undervalued in the public markets and concludes that those statements point to a price between $19.50-$21.00 per unit.

In the third quarter of 2020, BAM’s Chief Executive Officer Bruce Flatt noted that “[BPY’s] current trading price does not reflect anywhere near the value of the high-quality portfolio of real estate that it owns.”

Meanwhile, in late September 2020, Bryan Davis, BPY’s Chief Financial Officer stated: “And that investment today can be made at a substantial discount to intrinsic value, 60% if you consider it relative to our IFRS value, or 50% if you consider it relative to consensus NAV.”

The report presents these and other Brookfield-related quotes and substantiation for the following key points. It can be found here: https://www.pecloserlook.org/bpy/

  • In the third quarter of 2020, BAM reported the value of “non-controlling interests” in BPY at $26 billion, while its buyout offer is valued at $5.9 billion;
  • BAM and BPY executives publicly stated in 2019 and 2020 that BPY’s trading prices undervalued its assets;
  • At Brookfield’s Investor Day presentation in September 2020, management reported BPY’s net asset value (NAV) at $27.01 and stated the consensus NAV of analysts was $19.50 per unit;
  • The premium to BPY’s unaffected trading price offered by BAM in this deal is 14%, lower than the premium Brookfield companies have offered in a sampling of buyouts over the last several years.
  • BAM has amassed $75 billion of capital and dry powder to invest in distressed assets and the post-pandemic economy.

“Brookfield Property investors have financed a world-class portfolio, which BPY’s and BAM’s executives have in the past year valued higher than $16.50, the price offered in this related-party buyout,” says Dana Wise, research deputy director for UNITE HERE.

Contacts

Dana Wise, UNITE HERE, 202-431-8831

Industry:

UNITE HERE

Release Summary
UNITE HERE questions the price of Brookfield Asset Management’s offer to buy out public investors of Brookfield Property Partners in new report.
Release Versions
English

Contacts

Dana Wise, UNITE HERE, 202-431-8831

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