By Suzanne Kapner, Alexander Gladstone and Miriam Gottfried
Mall owners Simon Property Group Inc. and Brookfield Property Partners LP are poised to acquire J.C. Penney Co. out of bankruptcy in a deal valued at roughly $800 million that will keep the beleaguered department-store chain alive amid the coronavirus pandemic, according to people familiar with the situation.
Simon and Brookfield, J.C. Penney's landlords, have reached an agreement in principle to buy the chain, which filed for chapter 11 in May after the pandemic shut down nonessential shopping across the country.
The landlords will own about 490 of the retailer's remaining 650 stores, one of the people said. A group of lenders will own 160 locations plus the company's distribution centers in return for forgiving some of Penney's $5 billion in debt. The landlords will pay the lenders rent on those 160 stores and distribution centers, the person said.
Simon, the biggest U.S. mall owner, and Brookfield are paying roughly $300 million in cash and assuming $500 million in debt, the person said.
The Wall Street Journal reported in August that Simon and Brookfield were the leading contenders to acquire Penney in a bankruptcy auction.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com, Alexander Gladstone at firstname.lastname@example.org and Miriam Gottfried at Miriam.Gottfried@wsj.com