Following the rejection of real estate investment trust (REIT) Simon Property Group‘s (SPG) $10bn bid to take over rival General Growth Properties (GGP), a new proposal would inject $2.5bn of capital into bankrupt GGP. The news comes nearly one month after HousingWire initially reported Simon Property was planning to sweeten its offer for GGP. In a letter today to GGP CEO Adam Metz, Simon Property’s chief executive, David Simon detailed the new offer. In his proposal, his company would invest $2.5bn in exchange for 250,000,000 shares of GGP common stock. That $10 per share price is equal to an offer Toronto real estate investment firm Brookfield Asset Management (BAM) made to the second largest owner of shopping malls in the United States. But, unlike the Brookfield deal, the Simon Property bid does not carry the provision to grant seven-year warrants to allow the purchase of 60m shares of existing GGP common stock at $15 per share. “GGP’s equityholders would accordingly not suffer the dilution contemplated by the Brookfield investment, and their ongoing interest in GGP would be substantially more valuable,” Simon said in his letter. “We estimate that this benefit could be at least $895m, or $2.75 per share based on today’s share count.” In addition, Paulson & Co. committed to investing $1bn in GGP should the Simon proposal be accepted. Paulson is a New York-based investment management firm that specializes in investing capital to companies emerging from bankruptcy. The Brookfield proposal would provide GGP with $2.5bn cash in exchange for common stock, as well as an additional $125m for stock priced at $5 per share for General Growth Opportunities (GGO), a company GGP intends to launch to spin off its master planned suburban developments as well as some of its landmark developments, most notably the South Street Seaport in Manhattan. In addition, the Brookfield deal includes cash infusions by GGP’s largest creditor, Fairholme Capital Management, and its largest shareholder, Pershing Square Capital Management, providing $2.8bn and $1.1bn, respectively, in the recapitalization. According to Simon’s letter, Simon Property would backstop the GGO rights offering and would otherwise enter into agreements on the same basis as Brookfield. If Pershing Square and Fairholme agree to amend their investment agreements with GGP to forgo the warrants currently proposed, Simon “would welcome them as co-investors in GGP’s recapitalization,” Simon wrote. If Fairholme and Pershing Square do not agree to forego the stock purchase warrants, Simon Property said it fully backstop the Fairholme and Pershing Square commitments, without stock purchase warrants. The proposal also includes provisions to placate antitrust concerns brought up since Simon first made its unsolicited $10bn offer for GGP. Under the proposal, Simon Property’s voting interest in GGP would generally be limited to 20% of the outstanding shares. GGP’s spokesperson declined to comment. Write to Austin Kilgore. The author held no relevant investments.