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New offer to Brookfield Residential shareholders values homebuilder at US$2.84B

The Canadian Press

TORONTO - Brookfield Asset Management Inc. (TSX:BAM.A) has hiked its offer to other shareholders of Brookfield Residential Properties Inc. (TSX:BRP) by 5.4 per cent as it seeks to acquire full ownership of the North American land developer and homebuilder.

Brookfield Asset Management and its affiliates already own nearly 70 per cent of BRP's shares and is now offering US$24.25 cash for each share that it doesn't already own.

The price is up 5.4 per cent higher than the initial offer of US$23 announced Oct. 23.

If all 35.9 million shares subject to the offer are sold, the deal will cost Brookfield Asset about US$870.6 million cash and value Brookfield Residential at about US$2.84 billion.

Brookfield Residential operates in 11 major markets, including Calgary, Edmonton, the Toronto area and several major U.S. cities. (Austin, Denver, Los Angeles, Phoenix, Sacramento, San Diego, San Francisco and the Washington, D.C., area.)

BRP's board is supporting the proposal and has scheduled a special meeting of shareholders for March 10. To be completed, the offer requires approval from at least two-thirds of votes cast and a majority of votes cast by shareholders other than Brookfield Management. It also requires approval from the Ontario Superior Court.

"We believe that the transaction offers strong value for Brookfield Residential shareholders, and we look forward to working towards its successful completion in early 2015," said Cyrus Madon, senior managing partner for Brookfield Asset Management.

On the Toronto Stock Exchange, Brookfield Asset shares closed up 48 cents at $58.22, while Brookfield residential stock rose $1.33 to $27.90.