A General Growth Properties Inc shareholder has filed suit against the company's directors, saying they should not have rejected Simon Property Group Inc's buyout offer of $10 billion, Bloomberg News reported on Saturday.
It reported the suit was filed on Friday in Cook County Circuit Court in Chicago by investor James Young and accused John Bucksbaum, chairman of the bankrupt Chicago-based mall operator, and six board members with breach of fiduciary duty.
General Growth spokesman David Keating declined comment, saying in an email message that he has not seen the suit and that he refrains from making comments about litigation matters.
Attempts to contact Simon Property and Young for comment were not successful.
Simon Property, the No. 1 U.S. shopping mall owner, revealed its buyout offer on Tuesday, saying it decided to go public after General Growth rebuffed its offer of serious negotiations.
Simon Property said on Friday it could not agree to conditions General Growth Properties wanted to impose before talks on Simon's bid for the No. 2 U.S. mall owner.
General Growth's terms for a nondisclosure agreement were not constructive and make clear your apparent interest in precluding our offer from moving forward or being considered by your stakeholders, Simon said in a letter to its smaller rival.
The letter is the latest salvo in a battle that has rapidly escalated after Simon went public with its offer following months of behind-the-scenes maneuvering.
General Growth, which became the biggest real estate failure in U.S. history when it filed for bankruptcy in April, has said it is pursuing an exit plan which includes emerging from bankruptcy as a stand-alone entity as well as potential deals.
General Growth has said it wants Simon to take part in its process, but the two sides have not been able to agree on the terms of a nondisclosure agreement, which is usually signed before a company opens up its books to another.
(Reporting by Jim Marshall, editing by Vicki Allen)