August 23, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of mall-based real estate investment trust General Growth Properties (NYSE: GGP ) rallied as much as 14% as rumors swirled that the company may put itself up for sale.
So what: The impetus for the rumor is a filing with the Securities and Exchange Commission from General Growth Properties' second-largest shareholder, Pershing Square Capital Management (run by Bill Ackman), that it has been in talks with Simon Property Group (NYSE: SPG ) to coordinate a possible takeover of General Growth. Brookfield Asset Management (NYSE: BAM ) , however, doesn't support the idea of General Growth selling itself. As its largest shareholder, Brookfield controls roughly 42% of the company through shares and warrants.
Now what: And who said daytime television had all the drama? With Brookfield controlling such a large stake in General Growth, a deal seems incredibly unlikely to happen unless Simon Property and Ackman pony up an insane premium. General Growth is still mired under $16.5 billion in debt, and, as a stand-alone company, doesn't seem like a particularly attractive investment at 20 times forward earnings and with a projected yield of just 2.4%.
Craving more input? Start by adding General Growth Properties to your free and personalized watchlist so you can keep up on the latest news with the company.