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Sandler O'Neill & Partners LP cuts GGP Inc. to 'sell'

Sandler O'Neill & Partners LP analyst cut his investment opinion of GGP Inc. to "sell" from "hold," anddecreased his price target to $22 from $25.

The analyst wrote in a research report: "Our growingsuspicion has been that Brookfield would take its time putting forth animproved offer and instead let the market's negative sentiment towards RetailREITs make its initial offer seem more attractive. This week's news thatBrookfield may be interested in acquiring another REIT caused GGP to tradeunder the $23 level for the first time since November 10. There is littleincentive for Brookfield to materially improve its offer (apart from adjusting theBPY stock/cash ratio to accommodate investors who can't accept BPY per theirfund mandates) given the lack of competing bidders. We also note that BPY isoff ~8% since the November 13, 2017 proposal to acquire GGP @ 50/50 BPY/cash,which implies the $23 offer is now worth $22.10. Thus, while we originally heldhope for a deal of $26, which approaches Consensus NAV of $28 but still belowBrookfield's $30 valuation, we now think $24 is likely the best offer, especiallyif Brookfield needs to source more cash."