Canada’s largest property owner has locked horns with the largest mall owner in the US in relation to acquisition of General Growth Properties (NYSE:GGP).

Toronto based Brookfield Asset Management (NYSE:BAM), which handles US$40 billion of business related property across the world, has signed a definitive agreement with General Growth for the latter’s recapitalisation. General Growth is the second largest mall owner in the US with 200 properties all over the corner.

There is another suitor in fray for General Growth Properties. Simon Property Group (NYSE:SPG), which owns 323 malls in the US, wants to acquire all of General Growth’s properties. Being the market leader, Simon isn’t interested in acquiring individual assets but all of General Growth.

Both Brookfield and Simon are at strong financial positions and each is trying there level best to acquire General Growth Properties.

Simon has sold stocks and bonds for worth US$4 billion and taking over General Growth Properties would consolidate its leadership with more than 500 properties.

On the other side, Brookfield has been trying to get into the US retail market since long. Its first attempt to purchase Mills Corporation and its 37 discount malls failed and the deal was eventually clinched by Simon group. Brookfield, in the past year, has raised US$5 billion through institutional real-estate investors contributing to its newly created fund for making acquisitions.

For both the rival companies, the General Growth Property is an opportunity worth enough to bank on, as all the malls are available at reasonable prices. It helps to understand that the cause of General Growth’s failure was its inability to refinance the large debt during the capital crisis. Due to this the company took bankruptcy protection in April, but its attractiveness for both suitors remains intact.

Both the corporations are trying to release the General Growth Properties form some of its debt load. Simons had talk with the company’s debt holders regarding the payment of their debts as part of the tender of buying the company. Now, Simon has garnered financing assurances from leading private equity players including Blackstone group. In connection with the financing of the acquisition, Simon has got US$6 billion credit line on its side from JP Morgan.

Brookfield will try to convert the US$1 billion debt of the company into equity. It also plans to free the company from bankruptcy the next year by paying off its remaining US$7 billion unsecured debt.

Now the main question left unanswered is that who will finally win the bid for general growth properties- Simon Groups or Brookfield? Let’s wait and watch. But Brookfield investors are likely to gain further as Simon is reportedly looking to sweeten its takeover bid. The stock is trading marginally down at US$16 per piece.