William Ackman of Pershing Square Capital Management LP told General Growth Properties Inc., the second-biggest U.S. shopping-mall owner, that it should consider a sale of the company.
Pershing Square, General Growth’s No. 2 shareholder, has discussed a takeover of the Chicago-based company with Simon Property Group Inc., according to a letter Ackman filed today with the U.S. Securities and Exchange Commission. Brookfield Asset Management Inc., General Growth’s largest shareholder, didn’t support the transaction and said it was interested in buying the company itself, according to the letter.
“Our goals are to ensure that a level playing field exists so that Simon, Brookfield and potentially other parties can compete to acquire the company,” Ackman said in the letter. Brookfield should be stopped from “unfairly acquiring control” of General Growth without paying a “premium in a competitively negotiated transaction,” he wrote.
General Growth exited bankruptcy protection in November 2010 following a takeover battle between Indianapolis-based Simon Property, its larger rival, and an investor group that included Brookfield and Pershing Square. General Growth filed for bankruptcy in 2009 after weighing itself down with $27 billion in debt that it was unable to refinance because of the financial crisis and collapse of the commercial mortgage-backed securities market.
General Growth climbed 9.5 percent to $20.27 as of 1:34 p.m. New York time. It was the stock’s biggest gain in more than a year, and its highest price in almost four years.
David Keating, a spokesman for General Growth, declined to comment today. Les Morris, a Simon Property spokesman, said he couldn’t immediately comment. A message left with Andrew Willis, a spokesman for Toronto-based Brookfield, wasn’t immediately returned.
Simon has been “effectively handcuffed and gagged” from pursuing a deal because of Brookfield’s influence over General Growth, Ackman wrote in his letter to General Growth’s board. Brookfield has gone from owning 29 percent of the mall owner to 42.2 percent through shares and warrants, Ackman said.
© Copyright 2014 Bloomberg News. All rights reserved.