LOS ANGELES » Shopping mall owner Simon Property Group Inc. is willing to settle for a slice of its biggest rival, just two months after its buyout offer was rejected as too low.

Simon, the nation's largest mall operator, offered yesterday to help finance General Growth Properties Inc.'s exit from bankruptcy in exchange for a quarter stake in the No. 2 mall owner.

Analysts suggested Simon may have backed off a bid for a complete takeover because of antitrust concerns. But a person familiar with the talks between the two companies said yesterday that General Growth has made clear it prefers a strategy that would give it the financial means to emerge from Chapter 11 bankruptcy protection, rather than to be taken over. The person was not authorized to discuss the matter publicly and so spoke on condition of anonymity.

Still, in a letter to General Growth CEO Adam Metz, Simon Chief Executive Officer David Simon stressed he remains ready to discuss a buyout of the company.

General Growth issued a brief statement noting it would study the latest Simon offer.

General Growth operates more than 200 shopping malls in 43 states, including Ala Moana Center and Ward Centers in Honolulu, and is the nation's second-largest shopping mall operator.

It sought shelter from creditors a year ago, resulting in the largest real estate bankruptcy in U.S. history. The company, based in Chicago, remains under Chapter 11 protection.

Regardless, it finds itself in the unusual position of courting buyout offers that promise to pay off creditors in full and even give shareholders a premium.

The company has put forward a plan that calls for Canadian property manager Brookfield Asset Management Inc., Fairholme Capital Management and Pershing Square Capital Management Inc. to put up more than $6.5 billion combined to finance its exit from bankruptcy.

Fairholme is one of General Growth's largest unsecured creditors, while Pershing Square is one of its largest shareholders. That proposal, which would split General Growth into two companies, also would pay off unsecured creditors in full.

The offer from Indianapolis-based Simon carves the same financial path out of bankruptcy for General Growth, but sweetens the deal for shareholders.

Under the terms of the offer, Simon would invest $2.5 billion and prominent financier John Paulson's Paulson & Co. would put in another $1 billion, which would give it a 10 percent stake in General Growth.

But unlike the Brookfield plan, Simon and any investor partners would not receive warrants to buy stock in the reorganized General Growth.

The lack of warrants equates to a benefit of at least $895 million, or $2.75 per share, Simon said.

“;By removing those warrants, by definition, the offer from Simon is more valuable to shareholders over the long run,”; said Cedrik Lachance, retail analyst for Green Street Advisors.

The Simon plan leaves it open for Fairholme and Pershing to remain co-investors, but only if they agree to forego the warrants. If they don't, Simon said it has other investors interested to round out the $6.5 billion proposal.

Simon's offer values General Growth at $10 a share, up from the $9 a share offer Simon made in February that was quickly rejected as too low. And like the Brookfield-led plan, it offers to backstop the spin-off of a portion of General Growth into a separate company at $5 a share.

Put another way, both plans value General Growth as a whole at $15 a share, but the Simon plan has the edge because it doesn't include the warrants.

Investors appeared to greet the details of the latest Simon offer with little enthusiasm yesterday. Shares of General Growth added 23 cents to $16.38. Simon shares fell 23 cents to $87.95.

General Growth must now decide whether to continue backing the Brookfield plan or adopt the Simon offer.

U.S. Bankruptcy Court Judge Allan Gropper in New York is expected to hold a hearing on a request by General Growth to approve the Brookfield proposal at the end of the month.

If its plan wins out, Simon said it would limit its voting interest in General Growth to 20 percent of shares in a bid to minimize any regulatory hurdles.