It's deja vu all over again. General Growth Properties
Now, General Growth is shopping for an investment bank -- but no one knows whether it wants help with the acquisition or needs assistance formulating a defensive strategy against it.
From bankruptcy to the belle of the ball
General Growth declared bankruptcy in the spring of 2009, after building up debt of $27 billion that became impossible to refinance. In early 2010, Simon Property Group
In late 2011, Pershing's manager, Bill Ackman, engineered a meeting with Simon to discuss a takeover of General Properties. Ackman is only the second-largest stakeholder in the company, with a stake of nearly 11%. Brookfield owns over 42% and nixed the deal, indicating that it might want to buy General Properties itself, though it never did.
Then, this past spring, Brookfield made an offer to purchase General Properties by selling 68 of the REIT's malls to Simon. Simon didn't bite.
Today, Brookfield publicly states that it neither wants to sell its stake in the REIT, nor buy it outright. In the meantime, it seems that Ackman has had enough. Last month, he penned a letter to the company's Board of Directors, requesting that a special committee be convened to look into a sale that would not unfairly favor Brookfield -- which Ackman obviously feels will continue to acquire GGP stock until it gains control over the whole kit and caboodle.
Through all of this, General Properties has been growing. In February, the REIT purchased 11 Sears
One Fool's take
It's difficult to put too much stock into this most recent round of intrigue, despite Ackman's aggressive stance. The companies involved have always tried pressure to get their way, and General Properties' board may have had enough, and just might put the issue to rest once and for all.
Still, the infighting has driven up the stock price, and many analysts see a purchase by Simon as a good thing, as long as the company pays a fair price. Whatever happens, it looks like profitable days ahead for investors of this coveted mall REIT.
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