General Growth sued for rejecting $10 billion Simon bid

General Growth Properties Inc. directors were sued by a shareholder claiming they shouldn't have rejected a $10 billion buyout offer from competitor Simon Property Group Inc.

Chairman John Bucksbaum and six other board members were accused of breaching their fiduciary duty to the bankrupt mall operator's investors when they turned down Simon's bid, according to a complaint filed yesterday in state court in Chicago, where General Growth is based.

"This conduct is substantially unfair to GGP and the company's public shareholders," investor James Young said in his complaint brought on behalf of stockholders and for the benefit of the company.

Simon, based in Indianapolis, offered to buy its largest rival out of bankruptcy for more than $10 billion in a bid made public Feb. 16. Under that offer, shareholders would get about $9 a share, including $6 in cash.

General Growth said the price was too low and that it would invite other potential buyers to make bids.

David C. Keating, a company spokesman, said he hadn't seen the lawsuit and couldn't immediately comment on it.

Young seeks a court order barring the directors from entering into any contract that harms the company or its shareholders, or makes it more difficult or costly for a would- be purchaser to acquire it, plus other relief including the reimbursement of attorneys' fees and costs incurred.

Blackstone TalksBlackstone Group LP, the world's largest private-equity firm, may join Simon's bid, two people with knowledge of the discussions said Feb. 18. Blackstone is in preliminary talks with Simon, said the people, who declined to be identified because the negotiations are private. Simon would lead any resulting partnership, one of the people said.General Growth rose 5 cents to $12.74 in over-the-counter trading yesterday, up 36 percent from the closing price on Feb 12.The case is Young v. Bucksbaum, 10CH07080, Cook County, Circuit Court, Chancery Division (Chicago).